According to the South China Morning Post report, China’s big four state-owned commercial banks have started large-scale internal testing of the country’s national digital currency. As per the report, the Bank of China, the China Construction Bank, the Industrial and Commercial Bank of China and the Agricultural Bank of China are working on the DCEP (Digital Currency Electronic Payment) with the central bank in major cities, including Shenzhen, according to the Guangzhou-based newspaper. The People’s Bank of China has been working on its national digital currency for the last five to six years.
Users who are taking part in the trial can use the app to top up their accounts, withdraw money, make payments, and transfer money after registering with their mobile phone number. The state-owned banks are also testing a scenario where users can make transfers to another account without an internet connection, the report stated. Several other central banks across countries are also exploring central bank-backed digital currencies. Employees at some of China’s big state-run banks have also already started to use the national digital currency to make transfers and pay bills.
China is all set to become the world’s first major country to have its own national digital currency. However, China may be leading the race of CBDC but is not the only contestant. Central banks across countries are currently exploring options for the same. Bank of Japan recently expressed its interest in issuing a CBDC. Earlier, a report from the Bank for International Settlements stated that the ongoing global pandemic has exemplified the need for central banks to create CBDCs.