Over the past few days, there’s been an endless buzz on crypto social media about China’s national crypto project. It began with a leaked image seemingly showing a digital wallet application built by one of China’s “Big Four” banks, the Agricultural Bank of China, a state-owned commercial enterprise.
The news was further confirmed with other reports indicating that the projects being rolled out as a pilot to government employees.
China’s National Digital Currency Is Being Rolled Out… Kinda
After a shutdown of most of China’s infrastructure due to the coronavirus, a late-March report from The Global Times — an outlet closely affiliated with the Chinese Communist Party’s de-facto mouthpiece — confirmed that “industry insiders” say China’s long-rumored digital currency project was “one step closer” to launching.
It seems that this report was true.
According to Dovey Wan, partner at Primitive Crypto, the People’s Bank of China officially confirmed on April 15th that it will be testing its digital currency project — named DC/EP, or Digital Currency Electronic Payment — in Suzhou, a city nearby Shanghai.
PBOC today officially confirms they will first test DCEP in Shuzhou,a beautiful city next to Shanghai, known for its classic Chinese garden, pic????????
The test case will be paying state owned banks employees’ half of their commute reimbursement in the form of digital RMB pic.twitter.com/07mA4Z0DEs
— Dovey "Rug the fiat" Wan (@DoveyWan) April 16, 2020
Wan claims that the test case will be to allow the employees of state-owned banks to pay 50% of their May commute reimbursement in the form of the digital token.
A more comprehensive report from China Star Market indicates that the testing will also include all local government employees, who will also purportedly receive their transportation subsidies for May in the token.
This is far from a full-fledged release, but analysis by Matthew Graham, CEO of Sino Global Capital, indicated that the PBOC seemingly intends to roll out the digital asset in three other regions in the near future.
Other Governments Are Ramping Up CBDC Efforts
Seemingly responding to China’s primacy in the central bank digital currency space, other governments and central banks have begun to ramp up their efforts.
Per previous reports from Blockonomi, South Korea’s central bank, the Bank of Korea, revealed at the start of April that it has launched a pilot program for testing a digital won.
According to Yonhap, which translated the press release, The Bank of Korea doesn’t see an immediate need for a central bank digital currency (CBDC) but needs to be prepared should “market conditions” change:
The need to issue a CBDC in the near future still remains slim when considering the demand for cash that still exists, the competitive payment service market and high level financial inclusion, but there is a need to be able to quickly take steps in case market conditions at home and abroad change rapidly.
There’s also been movement in France.
Late last month, the Banque de France published a request for proposals regarding CBDC “experiments” as the central bank is looking to gather more information about the benefits and risks that would come with a national digital currency. This comes as Germany’s central bank has also toyed with the idea of going digital.
And even Libra, despite it being far from a government or central bank, is seemingly trying to get its foothold in the digital currency space as fast as possible.
Announced today, the Libra Association is planning to change its original plan from a central stablecoin to offering multiple stablecoins backed by one nation’s currency, alongside its multi-currency stablecoins.
Libra board member David Marcus, head of Calibra at Facebook, updated the world further by explaining that the Association is hard at work on a sanction and anti-money laundering mechanism and a “market-driven” governance model.