China’s central bank digital currency (CBDC) development has reached a new milestone with 2 billion yuan in total payments being processed, although it is still in the testing phase. With several countries launching their own independent digital currencies, stakeholders are calling for more international cooperation on CBDCs.
CBDC tests run smoothly
Speaking at Monday’s session of Hong Kong Fintech Week, Chinese central bank governor Yi Gang; announced that $ 300 million has been paid in more than 4 million transactions so far with CBDC in the country. This figure represents an increase of almost 100% from $ 160 million recorded as of the end of September.
According to the central bank director, China’s digital currency electronic payment (DCEP) test runs smoothly in many cities in the country. However, Yi stressed that the DCEP is in its infancy and a comprehensive legal framework is needed before a full spread across the country is seen.
As part of the evolving legal framework, the People’s Bank of China (PBOC) recently issued a bill prohibiting the creation and issuance of cryptocurrencies pegged to the yuan. Some people say the move is a harbinger of full DCEP deployment.
In October, the PBOC announced plans to accelerate the development of DCEP in order to distribute the token during the 2022 Winter Olympic games. Also in October, PBOC officials denied allegations that officials in Beijing were planning to use the digital yuan to challenge WeChat Pay and Alipay.
Recently, Chinese President Xi Jinping called for proactive participation from the country in developing a global CBDC architecture.