As China continues to work on nationwide adoption of its central bank digital currency (CBDC), known as DCEP, which has been in development for the past six years, different reports have been emerging regarding its current testing phase.
According to a report by local news website, Southern Daily, DCEP is gradually approaching Guangdong which is capable of expanding its applications. During the second half of 2020 work video conference held this week by China’s apex bank (PBOC), it was revealed that they initiated the closed trial of the CBDC. Likewise, there will be active and steady promotion of the currency in the second half of the year.
A representative (Bai Hexiang) of the PBOC who spoke with the Southern Daily noted that the first area where the platform would be officially deployed is the Greater Bay Area. Beijing is interested in turning the Greater Bay Area into a unified economic hub. Hong Kong, Macau and Shenzhen are closely situated in China’s Greater Bay Area with a total GDP of $2 trillion.
Hexiang said financial institutions and companies in the region dealing with high volumes of cross-border trade would be first on the list of firms to pilot the platform. According to experts, the financial technology industry of Guangdong is comparatively developed with the natural merit of carrying a digital currency.
A financial analyst, Xiao Lei, said the large-scale cross-border adoption of DCEP ahead could place Guangdong among the most critical markets. The Greater Bay Area is characterized by competing legal systems, which is a challenge. Likewise, there are no standards for things like customs and financial regulations, thereby making the region a demonstrating ground for blockchain and digital ledger technology.
In recent times, it was reported that leading state-owned banks are testing digital wallet applications in Shenzhen as well as other places as they prepare to implement the CBDC. The PBOC has been able to complete the DCEP project’s backend developments.