The latest official statement from China’s Commerce Ministry seeking to comprehensively deepen pilot tasks, highlight specific measures, and specify the division of responsibilities for the innovative development of service trade reveals that more cities in the second-largest economy will pilot the digital yuan.
This is per the update on Aug 14 further indicates that the deployment of the DC/EP is near, a few months after the PBoC announced the conclusion on a closed trial program with several state-backed commercial banks.
Digital Yuan Pilot Cities Increased
As previously reported by the state-backed news agency, Xinhua, the closed pilot was only carried out in major cities including Shenzhen, Suzhou, Xiong’an New District, and Chengdu.
This trial allowed participants to test a mobile app for storing and exchanging the DC/EP to improve the application’s functionality as part of the country prepares to host the 2022 Winter Olympics in Beijing.
Today’s announcement widens the test area. More cities in Northern, Eastern, and Mid-China are open to pilot the digital yuan depending on if permitting conditions are met. They will receive support from the four initial cities which first piloted the coin.
As the issuer, the PBoC will create policy as safeguards but there was no indication of the exact timeline of when this pilot will begin. However, the policy design of the DC/EP will end by the close of the year.
An extract read (translated) read:
“The People’s Bank of China formulates policy guarantee measures; first from Shenzhen, Chengdu, Suzhou, Xiongan. The new district and other places and relevant departments of the future Winter Olympic scene will assist in the promotion, and the follow-up will be expanded according to the situation to other areas.”
A Stable Coin Necessary to Meet the Demands of the Digital Economy
This move is in line with what officials had projected. Earlier, it was said the central bank would embark on a rigorous but prudent research and development mission in the second half of the year.
Vital, all loopholes must be sealed such that once deployed, the digital yuan will sufficiently serve its purpose of satisfactorily meeting the demands of a digital economy.
Chinese officials hope to expeditiously use the digital yuan to eliminate fraud and to improve security.
This will help strengthen and boost the development of the country’s digital economy as the central bank seek to strike a perfect balance. While the DC/EP will replace some of the country’s monetary base, it won’t affect other aspects of China’s money supply.
As earlier reported that China could easily move from a digital yuan to a regional stablecoin backed by East Asian economic giants.