China announces major expansion of digital yuan trials

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China announces major expansion of digital yuan trials

Beijing has announced it is launching a major expansion of trails to test a digital version of its yuan currency.

China's ministry of commerce said on Friday the new digital currency, known as DC/EP, or digital currency/electric payment, would be trialed in cities across the country's most-developed regions.

The new cryptocurrency, which is being developed in partnership with the People's Bank of China, would remain under the governance of the Chinese central bank, and would be an alternative to the yuan, the government said. 

Pilots of the cryptocurrency are already underway in Shenzhen, Suzhou, Chengdu and Beijing. The trials are now to be extended to Guangdong province, Tianjin, Hong Kong, Macau and the Yangtze river delta.

If successful, the DC/EP digital currency would be the first to be launched by a central bank. The People's Bank of China has confirmed the new currency has similar features to well-established rivals Bitcoin and Etherium. 

In a statement, the ministry said the government's efforts to encourage innovation, such as broader use of the digital currency and artificial intelligence, are "aimed at moving China into higher-value industries and upgrading the country's economy," according to the Wall Street Journal.

 

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Christopher Copper-Ind

Christopher Copper-Ind is editor-in-chief of International Investment. Before this, he was editorial director of The Business Year, from 2014 to 2017.