Following public testing in Shenzhen, China's government will implement a new lottery in Suzhou province to test new functionalities of its DCEP, the nation's CBDC digital currency.
The month of December has already begun and with it the day of one of the most famous shopping festivals celebrated by the People's Republic of China, the “Double 12” or Couples Festival, is approaching, an event that attracts millions of buyers, and in which businesses take the opportunity to sell their products massively. Also for the government it is the perfect time to reintroduce its DCEP, the digital currency developed by the PboC, the Central Bank of China.
The People's Republic of China, one of the largest powers in the world, has been developing its digital currency project for more than 6 years CBDC and, although it has developed several internal tests to determine the viability of the currency, since this year it began public tests where thousands of citizens use the digital currency in real use cases, which allow the bank to evaluate the performance and viability of using this digital currency among its population.
In mid-October, the PboC conducted the first public test of its digital currency, distributing more than 10 million digital yuan to 50.000 citizens in Shenzhen province. Now the second public test of the DCEP will be more ambitious, according to the central bank's announcement. The entity confirmed that this December 12, with the arrival of the Double 12 festival, a total of 100.000 citizens of Suzhou province will receive 200 digital yuan in the form of red packets that they can enable and use to make purchases at stores authorized for the test. But that's not all, PboC will also test new features for DCEP, such as offline payments and the “touch” function, which were not implemented during the test carried out in Shenzhen.
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Expanding tests for the digital yuan
The report issued by Shenzhen province on the first public test of the DCEP reveals successful results for the use of digital currency. More than 95% of the beneficiary population at that time used their digital red packet, which also contained 200 digital yuan, equivalent to about $30 USD.
Now, a similar initiative will be carried out in Suzhou province, but this time doubling the number of benefited citizens and implementing additional functions for the digital currency. In this way, China's central entity will test new capabilities for its DCEP currency, which resemble and surpass fiat money transactions and payments and other applications.
“Just touch your smartphone” transactions
In this new public test for the DCEP, the PboC enabled offline transactions, which allow citizens to make effective payments without needing an internet connection.
Likewise, the PboC activated a second function for its digital currency, the touch function or “touch to pay.” As its name indicates, with this function citizens will be able to make payments and money transactions with each other instantly by simply touching their smartphones, facilitating the use of digital yuan beyond physical stores and connecting to a network.
Businesses in Suzhou province are already preparing to receive a massive wave of citizens who will use the DCEP this December 12. Currently, almost all businesses and stores in the province have installed payment devices and points of sale with Near-field communication technology (near field communication) and QR code readers, which will allow citizens to use their digital yuan and the entity to test the new functions mentioned for the DCEP.
Furthermore, JD.com becomes the first digital platform to accept payments with the DCEP, so citizens who prefer will be able to make their purchases through this online platform.
The 100.000 citizens who will receive the Central Bank's digital red packets will be chosen at random, similar to the process carried out in Shenzhen, where the beneficiaries were chosen among the province's residents who registered on the entity's digital public services platform. , based on technology blockchain.
China, at the forefront of innovation
For several years now, the Asian country has been a global technological superpower that is home to several of the giants and leaders of this industry, such as Huawei y Didi chuxing, who also participate in the development of the nation's DCEP. And although China has a recognized global position, the country seeks to continue leading the technology sector in various axes such as Artificial Intelligence (AI), 5G networks and Blockchain, in addition to transcending into other sectors, such as the economic and financial sectors.
The political and trade tensions between China and the United States drive the nation to continue its quest for global leadership, and the DCEP has become an essential tool to achieve this goal. Through this currency, the Asian nation aims to break the hegemony of the US dollar, which continues to be the main reserve currency globally.
As indicated by the vice president of the China Center for International Economic Exchange (CCIEE), Huang Qifan, the development of the DCEP not only responds to the need to digitize the country's fiat currency, but also to provide value to society through a digital currency that has the potential to “replace reserve money.” Qifan's statements reveal that the intention of the Central Bank of China and the government is to internationalize its currency and confront the current dominance of the US dollar.
Expanding the panorama
The Asian nation is the most advanced, for the moment, in the development of a CBDC digital currency worldwide, and is beginning to make other implementations and use cases with this digital currency to understand its potential. For example, over the weekend the chief executive of the Hong Kong Monetary Authority (HKMA), Eddie Yue, revealed that the Authority is holding discussions with the PboC to carry out a technical pilot test that would allow the Republic and the administrative region of Hong Kong to use the DCEP in cross-border commercial transactions.
On the other hand, Singapore is also maintaining an alliance with China to integrate the blockchain network BSN (Blockchain Services Network) from China to the network Blockchain for Trade & Connectivity (BTC), which was recently announced by Enterprise Singapore (ESG) together with the Singapore University of Social Sciences (SUSS).
The BTC network, not to be confused with the system or cryptocurrency Bitcoin (BTC), is a new blockchain network designed to optimize trade and connectivity between various blockchain networks and other technologies, which seeks to ensure much more reliable and secure supply chains, strengthening trust in Singapore as a global commercial center. This initiative is joined by China's BSN, along with other networks such as Global Electronic Commerce Services (GeTS) and the public business blockchain VeChain.
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