Following the first large-scale test of China’s Digital Currency/Electronic Payment (DCEP) platform in Shenzhen, China’s Ministry of Commerce has announced an expansion of DCEP tests to more cities. It's also putting the platform through its paces handling high-volume commercial transactions for verticals including hospitality and e-commerce payment processing.
China’s Ministry of Commerce recently published a detailed plan for testing its DCEP in three main financial and political hubs in China, including what it calls the “Yangtze River Delta economic zone”, covering Shanghai and the three neighboring provinces of Jiangsu, Zhejiang and Anhui, Beijing, as well as the Hong Kong-Macau-Guangdong Greater Bay Area.
From this list, Suzhou, a city in the province of Jiangsu, will be the first to test the digital RMB. According to a source in the city that spoke with local tech and finance publication Jingji21, the city's DCEP trial is focused on commercial transactions such as retail, e-commerce, education, and transit card top-ups.
Another source that spoke with Jingji21 said that tests in Shenzhen have pivoted in this direction as well. Decrypt media partner Forkast was able to confirm this by surveying shoppers in Shenzhen at a convenience store to see if they were using DCEP to pay for transactions.
Internal disagreements hinder DCEP development
According to a source that spoke with Forkast and declined to be identified, the People's Bank of China (PBoC) and Ministry of Commerce still have some internal disagreements over the DCEP to resolve, and it is not clear how that would affect the digital currency’s rollout. Every employee on the PBoC’s DCEP project staff has signed a non-disclosure agreement and is forbidden to discuss the project’s inner workings.
Stakeholders that spoke with Jingli21 said that there is still plenty of internal debate at PBoC about the difficulties in changing user habits—weaning them off WeChat and Alipay—to make sure that the platform has traction.
For its part, the PBoC and Ministry of Commerce both say that work on the platform continues and they are listening to feedback from stakeholders to better improve the process.
“We will accelerate and pour more attention and resources to expand DCEP’s use cases into the broader economy as per the guidance from the Ministry of Commerce and the PBoC,” a spokesperson for DCEP is quoted as saying. “The technical conditions are ripe and the risks are under control.”
This story was produced in collaboration with our friends at Forkast, a content platform focused on emerging technology at the intersection of business, economy, and politics, from Asia to the world.
Stay on top of crypto news, get daily updates in your inbox.