The Peoples’ Bank of China plans to expand its trial for digital yuan to include more cities, a report Saturday (April 3) from Bloomberg said.
This comes because the market response was good toward the use of the central bank digital currency (CBDC) in both the pilot cities and the Winter Olympics venues where it was tested.
Transaction scales had been “growing steadily,” according to the report.
The next steps will include more privacy protection and crime prevention. And the bank will be researching the impact of the coins on the financial system.
The trials took place in Shenzhen, Suzhou, Xiong’an, Chengdu, Shanghai, Hainan, Changsha, Xi’an, Qingdao, Dalian and the closed loop of the 2022 Winter Olympic Games.
Now, there will be trials in Tianjin, Chongqing, Guangzhou, Fuzhou, Xiamen, Hangzhou, Ningbo, Wenzhou, Huzhou, Shaoxing and Jinhua to the list of trial cities.
Beijing and Zhangjiakou and the Winter Olympics and Winter Paralympic Games will keep using the coins.
PYMNTS wrote that there have been other countries and banks working on digital coins, including the Bank for International Settlements (BIS) and four central banks, which have been working on blockchain-based platforms for a multinational CBDC technical standard.
Nationally issued CBDCs, including the digital yuan, could end up making both retail and interbank payments easier and more streamlined, while also offering potential benefits for cross-border payments.
That said, they’d also need to be able to talk to each other to make that happen — which is the goal of Project Dunbar, which includes the central banks of Australia, Malaysia, Singapore and South Africa.
The report noted that there’s was agreement that the digital ledger technology (DLT) that blockchain is based on was a good way to streamline payments, but there wasn’t a specific blockchain platform to use yet.
The BIS project tested two permissioned protocols, one of which was built on R3’s Corda, a DLT platform that has been described as “both a blockchain and not a blockchain,” and Quorum, the JPMorgan-designed blockchain platform based on Ethereum.