China’s long-awaited state-backed digital currency, dubbed DC/EP (for Digital Currency/Electronic Payments) could be seeing the light of the real economy before the end of this year, according to domestic news portal Caijing.
The Deputy Director of the People’s Bank of China, Mu Changchun had previously characterized exaggerations about DC/EP launching as soon as November 11th this year as mere speculations. However, new information suggests that the digital currency might be tested in the cities of Shenzhen, and Suzhou before the end of 2019.
If this is true, China’s claims to be the first economy to issue a national cryptocurrency won’t be as far-fetched as previously considered, and President Xi Jinping’s vision of making the country the global leader in the fintech sector will fast enough become a reality.
Caijing’s report says that PBoC plans on launching a small-scale experiment in Shenzhen, which should naturally expand in more cities within the next year.
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It is unclear why Shenzhen was chosen over other financial columns such as Hong Kong, and Shanghai to test the digital currency, yet is not really an ‘out-of-the-blue’ situation, considering that Shenzhen is often referred to as the ‘Silicon Valley of China’, meaning that it has the technological infrastructure to support such a transition, especially when taking its Special Economic Zone under thought.
While most of the details were already picked by previous announcers of the Chinese stablecoin, some significant details are left to be revealed by Caijing who says that DC/EP will work with the four largest banks to deliver the newly issued digital currency to customers in a competing way, in order to find the best-case scenario, as well as identify possible flaws in the system.
Besides the banking institutions, seven state-owned tech firms including AliPay, WeChat, and TenPay, will be also among the initial distributors of the currency in their own app domain, while three large telco giants including Huawei will be also involved in the infrastructure of the project.
Other key details reveal that the pilot program will be deployed in real-life scenarios around the areas of transportation, education, medical treatment, and retail payments, reiterating that DC/EP will be a direct replacement for the remaining local fiat money, which has been already decreased by nearly 80% and replaced with payment apps mentioned above in the course of the past half-decade.
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According to PBoC officials, the digital currency has been under development for some five years, while some of the first use-cases of the state-owned blockchain besides the DC/EP include the issuance of special financial bonds for local SMEs aiming to boost the flourishing economy.
China’s trust on the matter in the private sector seems to be omnidirectional analogizing that most top-shelf domestic firms are partially state-owned, while in the Eurozone recent ECB announcements are citing that if regional private firms continue to fail to deliver what’s promised in terms of real-time cross-border settlements, the European Central Bank will have to take the situation on its own hands, considering seriously the issuance of a digital Euro.