(Bloomberg) -- China’s central bank has given the green light for some commercial lenders to run trials of its digital currency, according to people familiar with the matter, bringing it a step closer to becoming the world’s first major monetary authority to issue its own digital tender.
State-owned Chinese banks are conducting internal, hypothetical-use tests of a People’s Bank of China digital currency as if it were being used in Suzhou, Xiong’an, Chengdu and Shenzhen, the people said, asking not to be named as they’re not authorized to speak on the topic.
The functions of the “pilot” digital wallets include conversion between cash and digital money, account-balance check, payment and remittance, one of the people said. They added the research is still ongoing and those functions are subject to change.
The central bank didn’t immediately respond to an email seeking comment on the trials.
China’s central bank has led global peers in development of digital legal tender, setting up a separate research team for the task and filing hundreds of patents. At a meeting earlier this year previewing the work in 2020, the bank said the research is going smoothly, though it hasn’t named a specific timetable for when the currency would be released to the public.
The digital currency will aim to partly replace cash to adapt to the increasing dominance of digital payments in China’s retail sector.
©2020 Bloomberg L.P.
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