- Work on China’s Digital RMB, or DCEP, continues with testing underway in Shenzhen.
- When it launches, the Greater Bay Area, a region comprising of Guangdong, Hong Kong, and Macau would be the first place where the technology is publicly piloted.
- With its competing legal systems, the Greater Bay Area has been a focus point of removing barriers to trade with blockchain.
Fresh off the announcement that the retail DCEP app is undergoing the final stages of beta testing in Shenzhen, a representative from the People’s Bank of China told local media in the country that the first area where the platform would be officially deployed is the Greater Bay Area.
The Greater Bay Area is a regional amalgam of Hong Kong, Macau, and Shenzhen, with a combined GDP of $2 trillion that Beijing wants to turn into a unified economic hub. Its competing legal systems, however, make that a challenge. The lack of standardization for things such as customs and finance regulations have made the region a proving ground for blockchain and digital ledger technology. In June, China Guangfa Bank launched a blockchain-based system for seamless cross-border payment settlements.
The first to use DCEP
Speaking to the Southern Daily, a newspaper that serves as the Communist Party of China mouthpiece for Guangzhou, Bai Hexiang, the President of People’s Bank of China’s Guangzhou Branch, said that financial institutions and firms in the region that deal with high volumes of cross-border trade would be first on the list of companies piloting the platform.
“Considering the large-scale cross-border adoption of DCEP in the future, Guangdong might be one of the most important markets,” said Xiao Lei, a financial analyst to Southern Daily, “Guangdong has a well-developed business environment, large population and wide range of international trade, all which will help push with the adoption of DCEP.”
Since Beijing has identified blockchain as a strategic technology, the PBoC and the China Banking Regulatory Commission have published a blockchain-based "master plan" for the region — a pillar of which is the adoption of blockchain technology to facilitate trade.
During the system’s initial pilot phase it closed approximately 2,779 loans across 524 companies with a total value of $7.8 billion.
DCEP in time for the Olympics?
In previous announcements, the PBoC said that DCEP would be launched in time for the 2022 Olympic games tentatively scheduled to be held in Beijing. However, an official time table for the launch has yet to be announced.
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