When the ban on cryptocurrency in China was announced in 2018, many saw this as an indication that the country did not have any faith in cryptocurrency as a concept and as cryptocurrency intended to take on the world stage, China intended to sit out the experience and remain a crypto-free state. However, 2019 came as a surprise when it was announced that the Chinese Central Bank is developing a national digital token which is to be launched in 2020 and some believe that this is in response to Facebook announcing the Libra token and the general increase in cryptocurrency use across the world.
While many of the details surrounding the token have been kept a secret, it has been revealed that China intends to launch the first real-world test of the digital Yuan token in the near future.
According to December 9, 2019 reports, the first testing of the digital token will take place in the city of Shenzhen and it is also possible that the city of Suzhou will be involved in the pilot as well.
This testing will be supervised by the Peoples Bank of China but will also see four major banks as well as international participants such as China Telecoms take part in the test in order to determine the viability of the project and well as its possible use on a large scale across the country of over 1 billion people.
“One step will be to rationally select the pilot verification area, scenario and service scope, and steadily promote the introduction and application of digital form of fiat currency,” the report explains, “Compared with the previous pilot, this time the central bank’s legal digital currency pilot will go out of the central bank system and enter real service scenarios such as transportation, education, and medical treatment, reaching C-end users and generating frequent applications.”
Besides a testing period, this will also serve as a horse race of sorts for the four banks with each competing to secure the widespread adoption of the token in the future and the Peoples Bank of China determining which bank has the most effective system to get this done.