The first round of trials for China’s central bank digital currency (CBDC) was focused on five regions. On Friday, Zhang Jinsong, Deputy Secretary-General of Beijing municipality, said the city that is not part of the initial five locations is preparing to create a digital yuan pilot program.
Jinsong also spoke about exploring cross border data flow.
Three months ago, the Ministry of Commerce (MOFCOM) outlined such an expansion as part of a three-year plan, but the timing was unclear. Also, the digital currency is the responsibility of the central bank rather than the Commerce Ministry. MOFCOM said the trade testing regions would be Beijing-Tianjin-Hebei, Yangtze River Delta and the Guangdong-Hong Kong-Macao Greater Bay Area. The Ministry asked for policy measures to be formulated by the end of 2020.
One of the first five initial test regions, Xiong’an New Area, already has plans to use the digital renminbi for cross-border trade.
We also noted that a recent significant increase in transaction values might signal more use in commerce rather than purely by individuals.
The first five trial areas for the CBDC are Shenzhen, Suzhou, Xiong’an, Chengdu, and future Winter Olympics locations. There have been low key trials in most of the areas and a broader public lottery in Shenzhen. A second lottery is rumored for Suzhou, one of the first testing locations for transport subsidies for workers at state-owned banks.