China’s state digital currency nearly ready, says central bank

China’s central bank has issued a paper stating it has completed much of the development for its new digital currency, reported local news outlet JRJ. 

The report said that the bank has finished the top-level design for the currency; formulated the necessary standards, research and development; and completed testing for the currency, both as a substitution for base money, and for anonymity, according to JRJ. 

According to Chinese media site Caijing, the currency, known as DCEP, will debut as small-scale experiments in Shenzhen and Suzhou. Observers said the cities were chosen because they are near to the central bank, reported Chinese crypto news site Jinse. 

The government has also piloted measures to restrict the withdrawal of physical money. State-run news agency Xinhua said the pilot is a measure to combat money laundering; crypto-analyst Dovey Wan tweeted it’s a precursor to test out the suitability of digital cash. 

Addressing concerns that the DCEP will be used as a mechanism for financial surveillance, Mu Changchun, who leads the bank’s digital currency research institute, told an audience at a conference in Singapore in November, “We know the demand from the general public is to keep anonymity by using paper money and coins...we will give those people who demand it anonymity in their transactions,” reported Reuters.

The publication of the central bank’s latest report follows an announcement by the Chinese government this week that it could launch a nation-wide blockchain network, called BSN as soon as April; the initiative is separate to the digital currency, but supported by large payments companies such as China Mobile, China UnionPay, China Merchants Bank, and others.