Major cities to pioneer China's digital currency electronic payment trials ahead of 2021 launch

The People's Bank of China (PBOC) has made tremendous progress in developing a central bank digital currency (CBDC). The Asian economic giant's latest is the expansion of the trials for the Digital Currency Electronic Payment (DCEP) to major cities.

The road to the launch of China's digital yuan takes shape

According to close observers, the trials are set to boost the sovereign digital currency to the final launch phase, perhaps in 2021. The Mayor of Beijing Chen Jining affirmed the optimistic outlook on Sunday, saying that the city will create innovative demonstration zones where fintech and professional services will interact during the year while piloting the DCEP.

Jining talked during the opening ceremony of the fourth session of the 15th Beijing Municipal People's Congress. Similarly, Shanghai's Mayor Dong Zheng also said that his city is committed to promoting digital currency.

The Governor of South China's Guangdong Province, Ma Xingrui, during the opening ceremony of the two local sessions, pledged support for the advancement of Shenzhen's city into a formidable pilot zone for the sovereign digital currency.

Shenzhen was among the first cities in the vast country to start the piloting of digital currency. At the moment, it has begun the third round of the trials, where 20 million digital yuan ($3.09 million) has been issued to Longhua District residents.

The expansion of the trails to China's major cities will set a precedent in the ongoing global race and bring the nation closer to the launch of the DCEP. According to a Shenzhen-based industry insider:

The pilot testing is only the first step of a long march.' Once launched, the digital yuan will reshape China's financial industry and unleash a promising digital finance service sector worth billions of yuan.

The central bank in 2020 expanded the testing from the initial small scale closed-loop trials to large scale open testing in several cities. Some of the cities picked for the early-stage testing included Shenzhen, Shanghai, Chengdu (East China's Jiangsu Province, Sichuan Province, and Xiongan.

The national DCEP supports both online and offline payments, which ensure inclusivity for fast-growing e-commerce platforms.

Globally, central banks are racing in the research and development of the CBDC's. However, China is miles ahead in the journey. The US Federal Reserve is also focused on studying central bank digital currencies but maintains no rush and prefers to do it right.