China’s central bank has denied rumors of its planned digital currency electronic payment (DCEP) system being used for large value transactions.
The People’s Bank of China (PBoC), is currently coordinating central bank digital currency (CBDC) trials across several cities in the country.
According to the Global Times, reports in China indicated that a housing payment in Shenzhen used the DCEP for the transaction. The recipient allegedly could not convert the digital funds to banknotes, casting some doubts on the useability of the digital yuan.
Responding to the rumor, a PBoC official clarified that the DCEP, in its current testing phase, was only for retail transactions. A Central bank employee also assured that the CBDC shared the yuan’s status as legal tender.
China’s food delivery market has been one of the earliest adopters of the digital yuan. Global restaurant and fast-food franchises like Subway and McDonald’s are also among the companies testing the system.
As previously reported by BeInCrypto, China is accelerating its efforts to launch the DCEP. Earlier in August, the government announced the expansion of the CBDC pilot program to Beijing and 27 other major cities.
Some commentators say the planned CBDC will have profound implications both at home and abroad. On the domestic front, authorities in Beijing may use the digital yuan to checkmate the Alipay-WeChat Pay retail payments duopoly.
Indeed, the PBoC is developing universal barcode infrastructure that will replace multiple QR code scanners displayed by merchants with a single payment gateway. Outside China, speculation already exists that the DCEP may be challenging U.S. Dollar hegemony in cross-border transactions.
China’s CBDC development also follows the country’s blockchain expansion with significant public and private partnerships exploring the novel tech. As of mid-August, 15,000 new blockchain firms have emerged in China since January.