China’s digital currency – explained!
China’s digital currency undergoes internal testing
A Chinese central bank official said on Thursday that the development of digital currency in China has yielded first results. Digital yuan undergoes internal testing.
Fan Yifei, Deputy Governor of the People’s Bank of China (PBC), the country’s central bank, said on Thursday during a payments and settlements forum that digital currency is an important part of the structural reform of the financial proposal.
«This is the digitalization of M0, or cash in circulation, using new technologies in order to provide a universal technical currency for the development of the digital economy. Digital currency in China undergoes internal testing», – Fan said.
With regard to digital payment services, Fan also proposed to actively encourage the use of scientific and technological tools to facilitate the use of electronic certificates and electronic signatures for opening business accounts..
«Internal testing is mainly intended to test the technical reliability and maturity of the digital currency. Internal testing requires the digital currency to work only within very clear boundaries, which places high demands on the testing scenario», – reported Chen Bo, Director of the Research Center for Digital Finance at the Central University of Finance and Economics.
The central bank is cautious about testing, as it limited itself to only internal tests. Chen noted that only when the volume of transactions reaches a certain level, the central bank can conduct external testing..
Derived from digital currency, digital bank cards have become another focus of market institutions.
In August, China UnionPay and its affiliated institutions released the first «digital bank card», Implementing the whole process of digital application and fast receipt of cards, providing comprehensive and convenient digital financial services for cardholders.
Digital currency shares rallied sharply during the morning trading session on the news. Feitian Technologies Co shares up more than 3 percent after the start of trading in the red.
An internal experimental test of digital currency by the central bank has been launched in Shenzhen in Guangdong province in southern China, Xungang New District and elsewhere in China, the governor of the NBK said in May. And Gan. Digital currency will be used in pilot scenarios for the 2022 Beijing Winter Olympics.
«Unclear which scenarios the central bank will choose as the next test», – said Chen.