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China digital currency
EconomyChina Economy

China digital currency: Shanghai, Hainan among regions added to e-yuan trials

  • Six more regions, including Shanghai and Hainan, have been added to China’s digital currency pilot programme
  • China has been a forerunner in developing a central bank digital currency, with cross-border testing also under way

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Six more regions, including Shanghai, have been added to China’s digital currency pilot programme. Photo: Xinhua
Frank Tang

China has added six more regions to its pilot programme for the sovereign digital yuan, expanding the scope of testing as the country inches closer to launching the world’s first central bank digital currency among major economies.

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The financial hub of Shanghai, Hainan province in the far south, the central cities of Changsha and Xi’an, as well as the port cities of Qingdao in Shandong province and Dalian in Liaoning province have been chosen to participate in the programme, said Li Bin, head of the People’s Bank of China (PBOC) macroprudential policy bureau, on Monday.

By expanding its testing of the digital currency electronic payment (DCEP) – the technical name for the digital currency – China has consolidated its position as a global leader in developing a central bank digital currency (CBDC).

The Bank of Japan said last week it had begun testing its own CBDC, while members of the US Congress are showing increasing interest in a digital US dollar, and asked US Federal Reserve chair Jerome Powell and US Treasury Secretary Janet Yellen about the issue in hearings earlier this year.

China has been a forerunner in terms of digital currency research, with the PBOC chartering an institute in 2017 to study its technical aspects and create a development road map. The process accelerated after the rise of private stablecoins – cryptocurrencies backed by an existing sovereign currency – such as Facebook’s Diem, formerly Libra, whose redesign is backed by the US dollar to facilitate approval by global monetary authorities.
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