China to Pilot Digital Yuan With Four Banks in Two Cities – Report

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Tim Alper

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Tim Alper

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Tim Alper is a British journalist and features writer who has worked at Cryptonews.com since 2018. He has written for media outlets such as the BBC, the Guardian, and Chosun Ilbo. He has also worked...

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June 26, 2023 06:55 EDT

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China’s central bank, the People’s Bank of China (PBoC) is preparing to test the digital yuan in Suzhou and Shenzhen, with a pilot launch now “imminent,” per a new report.

Media outlet Caijing Magazine says it has learned details about the pilot project, which it says is being jointly led by the PBoC, as well as the so-called Chinese “big four” state-owned commercial banks, namely the Industrial and Commercial Bank of China, the Agricultural Bank of China, the Bank of China and the China Construction Bank.

China’s three largest telecoms providers are also set to take part in the pilot – with the state-owned China Mobile, China Telecom and China Unicom all named in the report.

Caijing adds that the PBoC could seek to increase the scope of its pilots, with “other,” as yet unnamed mainland locations being considered.

The PBoC has previously spoken about the possibility of conducting pilots before issuing a nationwide rollout, and has stated that it is aiming to introduce the digital yuan “gradually.”

The same media outlet also quotes an unnamed “senior technical expert” as stating that the PBoC has been working on a range of issues, but there is “still a long way to go” on the technical front before a rollout can be approved.

And the report’s authors believe that the project will make use of cloud-based technology and possibly 5G networks – two of Huawei’s core business areas. The Chinese tech giant has been repeatedly mentioned as a possible digital yuan partner for the PBoC, with Caijing also stating that the company may well lend its support.

As previously reported, Shenzhen has shown a great willingness to build up its blockchain sector. A state-owned PBoC subsidiary company went on a recruiting drive in summer this year.

And Caijing says a central bank-owned fintech company based in Suzhou has been “rushing to recruit blockchain talent” of late. The company’s official remit is conducting digital currency and cryptography-related research.