China to push trial of digital currency

Several Chinese cities will expand trials of digital currency, or the digital yuan, according to their tune-setting government work plans for 2021.

A staff member displays the banknotes and coins included in the 2019 edition of the fifth series of the renminbi at an Industrial and Commercial Bank of China (ICBC) branch in Beijing, capital of China, Aug. 30, 2019. (Xinhua/Chen Yehua)

Beijing will accelerate the building of innovative demonstration zones for fintech and professional services this year and promote the pilot application of the digital currency, revealed the city’s government work report delivered on Jan. 23.

Ma Xingrui, governor of south China’s Guangdong province, vowed on Jan. 24 when delivering a local government report that authorities will support the development of the city of Shenzhen into an innovative pilot zone for the country’s digital currency.

When delivering a government work report on the same day, Shanghai Mayor Gong Zheng said that the metropolis will continue financial opening-up and the promotion of the digital currency’ pilot application.

In mid-January, the government of Suzhou, in east China’s Jiangsu province, announced to promote the pilot application of the digital currency and turn the city into a digital currency industry cluster in the following five years.

These plans signal that the digital currency will be subject to large-scale application, said Li Quan, a professor in the department of finance under Nankai University in north China’s Tianjin municipality.

In 2020, the trial operation of the digital yuan expanded from small-scale testing to large-scale testing, especially in Shenzhen and Suzhou. Customers can use apps with digital yuan offline payment functions to complete transfers or payments when the network is not available and make digital yuan payments by using wearable devices.

In addition to offline payments, the digital yuan also supported online payments on e-commerce platforms in trial runs.

This year, more application scenarios of the digital currency will be explored and more cities will conduct small-scale testing of the digital yuan, said Su Xiaorui, a senior fintech analyst.