The People’s Bank of China’s digital currency is being tested in the new Xiongan area of northern China’s Hebei Province, a new report said. Trial operations include the food and retail industries, such as the massive US chains Subway, Starbucks and McDonald’s.
China is testing the CBDC
News of China’s digital currency has appeared more frequently than ever in recent weeks. The latest local report on the matter states that testing has begun in the new Xiongan area. More specifically, she informed that local authorities held a roadshow of the CBDC project on Wednesday afternoon. Participants were in various industries. Among them were the Xiongan Development and Reform Office, work teams piloting digital currency from a subsidiary of the People’s Bank of China (PBoC), and representatives of AliPay and Tencent.
Employees of local branches of four commercial banks – the Chinese Industrial and Commercial Bank, the Chinese Agricultural Bank, the Chinese Bank and the Chinese Construction Bank – also took part in the testing phase.
Interestingly, some well-known companies based in the USA participated in the testing. It is a multinational chain of Starbucks cafes, a giant fast food company McDonald’s and a private franchise restaurant Subway.
Another testing company is a consortium of large state-owned construction companies that implement projects in Xiongan – Zhonghai SPV Group. The report states that could be among the initial users of the future CBDC.
It is likely that Zhonghai SPV employees may be the first to open CBDC wallets and spend currency in the above companies.
In addition to testing in Xiongan, CBDC tests are underway in three other cities – Shenzhen, Suzhou and Chengdu.
CBDC on the rise
While China may be among the first to develop and possibly introduce a state-sponsored digital currency, other actors and central banks are also making significant efforts.
Bank of Korea (BOK) has launched a test program to verify the capabilities and technologies needed to launch its own CBDC. If the demand for such a product increases over time, the country wants to be prepared to act accordingly.
The Facebook Libra project, the one that started it all, has recently undergone a major change in plans. The new “Libra 2.0” will be centralized and could create a number of different digital coins, each covered by a different government currency.
The growing interest and development towards the CBDC has attracted the attention of global regulators. The G20 Financial Stability Board (FSB) recently issued ten recommendations for the co-regulation of stablecoins, including CBDC and Libra.
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