People's Bank of China kicks off digital currency pilot program

The People's Bank of China has been speeding up the development of digital renminbi this year, as the central bank tested its use and circulation on a large scale in selected regions, including the Beijing-Tianjin-Hebei region, the Yangtze River Delta, the Guangdong-Hong Kong-Macao Greater Bay Area and some eligible locations in mid-western China.

The cities of Shenzhen, Chengdu and Suzhou and Xiong'an New Area in North China's Hebei province, as well as some venues for the 2022 Winter Olympics, will assist in the pilot run, which will, as appropriate, be expanded to other regions of China.

As China's legal tender, the digitalized yuan issued by the PBOC is called the "digital currency and electronic payment", or DC/EP, and aims to replace part of the cash in circulation, the central bank has said.

On Oct 12, Luohu district in Shenzhen, Guangdong province, distributed 10 million yuan in digital RMB to residents. With 50,000 digital "red envelopes", containing 200 yuan each, beneficiaries could spend the money within five days at 3,389 shops in Luohu that have installed the digital currency payment system.

When officially launched, the digital renminbi will have far-reaching influence. It will directly promote the advancement of financial technology, the realization of a cashless society and change the development model of the payment industry, according to an opinion piece from China Daily.