China’s Digital Currency, Electronic Payment (DCEP) initiative is further expanding to the capital of the Sichuan province, Chengdu. It will be the biggest trial thus far in its digital yuan testing phase.
China is leading the race to launch the world’s first fully adopted Central Bank Digital Currency (CBDC). It had earlier announced the commencement of trials for its digital yuan. The government gave out digital yuan to citizens as part of the test, encouraging retailers to accept it as a payment medium.
After completing the initial trial phases in Beijing, Suzhou, and Shenzen, the city of Chengdu is the next stop. Reports are surfacing that suggest this phase will be much bigger than previously held trials.
Over 40 million digital yuan have been allocated towards the Chengdu trial. The previously held trials across the cities and districts of Beijing, Suzhou and Shenzen have an average of 18 million digital yuan allocation per district and 110 million digital yuan in total allocation.
Trials in Chengdu will commence today (March 3) until March 19. It will target over 11,000 businesses in the capital city of Sichuan including China’s biggest online retailer, JD.com.
Increased calls for bitcoin regulations led to Central banks around the world throwing their weight behind CBDCs. The People’s Bank of China is apparently leading the pack after releasing its digital yuan. The digital currency is now nearing full-blown adoption.
Just last month, China’s Blockchain Service Network (BSN) unveiled its plans for the year. It stated that it intends to build a Universal Digital Payment Network (UDPN) within five years.
The DCEP trials kicked off officially in October last year in the Luohu district of Shenzen. Since then, over 3 million transactions worth $160 million have been carried out with the digital yuan.
Many expect the digital currency to fiercely challenge payment processors like AliPay and WeChat Pay. The PBoC’s head of research institute for digital currency, Mu Changchun addressed this saying:
“People will still be able to use WeChat Pay and Alipay after DCEP is issued. They don’t belong to the same dimension. WeChat Pay and Alipay are wallets for currency, while the digital yuan will serve merely as money in the wallet. DCEP will simply become a new addition to people‘s wallet”.