Testing for Chinese central bank digital currency (CBDC) is conducted in the Xiongan New Area, North China’s Hebei Province, a new report said. Trial runs include catering and retail industries such as the massive U.S. chains Subway, Starbucks, and McDonald’s.
China Trials Its CBDC
News regarding the Chinese digital currency has been emerging in the past few weeks more frequently than before. The latest local report on the matter claims that testing had started in Xiongan New Area. More specifically, it informed that local authorities held a roadshow for the CBDC project on Wednesday afternoon.
The participants varied from different industries. Those included the Xiongan development and reform bureau, working teams piloting the digital currency from a subsidiary of the People’s Bank of China (PBoC), and representatives from AliPay and Tencent.
Employees from the local branches of four involved commercial banks – the Industrial and Commercial Bank of China, the Agricultural Bank of China, the Bank of China, and the China Construction Bank – joined the testing stage, as well.
Interestingly enough, the trials included some well-known U.S.-based enterprises. Those are the multinational chain of coffeehouses Starbucks, the giant fast-food company McDonald’s, and the privately held restaurant franchise Subway.
Another testing party was the large consortium of major state-owned construction enterprises undertaking projects in Xiongan – Zhonghai SPV Group. The report noted that it could be amongst the initial users of the future CBDC:
“It is plausible that employees of Zhonghai SPV may be the first to open CBDC wallets and spend the currency in the aforementioned companies.”
Aside from the Xiongan testing grounds, CBDC trials are operated in three other cities – Shenzhen, Suzhou, and Chengdu.
While China may be amongst the leaders in terms of developing and possibly launching state-backed digital currency, other entities and central banks are making significant efforts, as well.
As Cryptopotato reported recently, the Bank of Korea (BOK) began a testing program to check the capabilities and necessary technologies required for launching its own CBDC. The country wants to be prepared to act accordingly if the demand for such a product increases in time.
Facebook’s project Libra, the one who might have started it all, recently went through a substantial change of plans. The new “Libra 2.0” will be more centralized, and it could create a series of various digital coins, each backed by a different government currency.
The increasing interest and developments towards CBDCs brought attention from world watchdogs. G20’s Financial Stability Board (FSB) recently made ten recommendations for a common regulation on stablecoins, including CBDCs and Libra.