China’s central bank digital currency (CBDC) will be trialled in Shenzhen in partnership with the Central Bank of China, the People’s Bank of China (PBoC), and two other state-owned banks, according to Chinese local news outlet Caijing.
The latest report indicates that several state-owned banks and organisations will be pitted against each other in what PBoC officials call a “horse race” to see which organisation can adopt the best model for digital-yuan use.
A pilot for 2019
Despite initial reports that the CBDC would be released next year, it has since emerged that the organisations behind the new digital asset will be launching an initial pilot before the end of 2019.
Local Chinese media reports that four major banks will be participating in the pilot, including the Central Bank of China and the People’s Bank of China, in addition to major telecommunications operator Huawei.
It’s the first time that the digital currency will be tested outside of a closed testing scenario, with the CBDC entering real service scenarios for the banks’ customers.
Caijing has reported that the CBDC will be initially trialled in the transportation, education, and medical industries.
Huawei previously announced in early November that it planned to work with the People’s Bank of China to research digital asset integration.
The announcement, which was part of Beijing’s push for better financial infrastructure, came during Huawei’s commitment to delivering a “solid digital financial base” for its Chinese users.
However, some critics have warned that Beijing could be pushing for a CBDC as a way to control and track the spending of its citizens, removing the opportunity for Chinese users to access permissionless currencies such as Bitcoin.
Disclaimer: The views and opinions expressed by the author should not be considered as financial advice. We do not give advice on financial products.