China to launch pilot digital currency program in some cities

WION Web Team New Delhi, Delhi, India Aug 14, 2020, 02.44 PM(IST)

File photo of a China yuan note. Photograph:( Reuters )

Story highlights

China's state-run media reported earlier this month that major government-run commercial banks were carrying out large-scale internal testing for a digital wallet application

China on Friday said it will launch a digital currency pilot program in some cities.

In an online statement, the Chinese commerce ministry said the cities would include northern Chinese region of Beijing-Tianjin-Hebei, the eastern region of Yangtze River Delta, "Greater Bay Area" around the Pearl River Delta, and some cities in Midwestern China. 

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China's state-run media reported earlier this month that major government-run commercial banks were carrying out large-scale internal testing for a digital wallet application.

Also read | China passes cryptography law to gear up for digital currency

The four banks that are conducting these testings are Bank of China, China Construction Bank, Industrial and Commercial Bank of China, and Agricultural Bank of China, and if these tests are successful, China will become world's country to have a sovereign digital currency. 

China's push towards digital currency will strengthen it's already dominant digital payments infrastructure, which according to The Brookings Institute, is more advanced than many of its Western counterparts.

Meanwhile, Switzerland-based Bank for International Settlements conducted a survey in 2019 that found that as many as 80 per cent of the world's central banks have shown interest in the idea of developing a sovereign digital currency. 

The G7 nations are mulling over a collective move on central bank-sponsored digital currencies.