By Staff Writer
China is to trial its digital currency in three major cities and an economic zone near Beijing in what has been described by official Xinhua News Agency state news agency as “internal closed pilots.”
The cities of Shenzhen, Suzhou and Chengdu, as well as the Xion’an New Area near Beijing has a total population of 38mn.
The new blockchain-based digital currency is to be used in payments including local government employees’ transportation subsidies, according to reports. This would make China the first government in the world to roll out a digital currency.
The digital currency known as e-RMB will not be issued in large amounts for public use and it will not lead to a surge in inflation, state-owned China Daily quoted a statement from the People’s Bank of China as saying.
The digital currency can be exchanged without an Internet connection and that it can be used to make contactless payments, Mu Changchun, head of the PBOC digital currency institute,was quoted as saying.
The government, however, is mum on the exact launch date, although several local report point towards a mid-2021launch date.
A portion of transportation subsidies for local government officials will likely be issued in Suzhou from four state-owned banks as early as this month. They will be issued from Agricultural Bank of China, the Industrial and Commercial Bank of China, the Industrial and Commercial Bank of China, the Bank of China, and the China Construction Bank.
The news of Chinese digital currency has been there for long. Known as China’s Digital Currency Electronic Payment (DCEP) project, the project began as early as in 2014. As of now, many central banks are experimenting with some form of digital currency.