The People’s Bank of China (PBOC) has shed light on internal testing of its central bank digital currency (CBDC) following media reports that trials had already commenced across several cities.
PBOC has announced that at present digital renminbi research and development work has reached the age of internal closed testing at locations including Shenzhen, Suzhou, Xiong’an New District and Chengdu, as well as at sites for the Winter Olympics.
According to PBOC the testing process does not at all signify that the digital renminbi has officially been released, while closed testing will not impact the operation of commercial banks, or external financial markets and economic activity.
China first commenced research into the development of a CBDC in 2014, with PBOC officials alluding to the “imminent” release of a statutory digital currency at a press conference in August 2019.
Last week sources told Chinese media that internal testing of the CBDC had already commenced at state-owned banks situated in the cities of Shenzhen, Suzhou, Xiong’an and Chengdu.
Agricultural Bank of China (ABC) has reportedly launched the trial version of a mobile banking app with CBDC functionality embedded, while the big state-owned banks are expected to commence use of the CBDC to issue transportation subsidies to local officials in the city of Suzhou in May.
PBOC said that the digital renminbi system will consist of two tiers and serve as a replacement for the M0 cash money supply.