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Are pilots really about to start for China’s digital currency DC/EP?

digital currency renminbi yuan DCEP

Earlier this week, numerous Chinese outlets published articles about central bank digital currency (CBDC) pilots which are set to start imminently. But today the “pilots” are unofficially being reframed as “internal tests”, despite the original report that the four big state-owned banks were to be involved in the tests.

21st Century Business Herald learned about the downgrading of the pilots from a source “close to” the Digital Currency Research Institute, a division of the People’s Bank of China (PBoC).

The currency is referred to as DC/EP, which stands for digital currency / electronic payment because it’s a two-tier currency in which banks buy the digital coins from the central bank. And the banks then distribute the coins to consumers.

The banks involved initially are Industrial and Commercial Bank of China (ICBC), China Construction Bank, Agricultural Bank of China, and Bank of China. And the three telecoms companies are China Telecom, China Mobile, and China Unicom.

A speech given by PBoC deputy governor Fan Yifei was the trigger for the original reports of the pilots. In the talk, he said that the currency had completed its top-level design, formulation, functional research and testing. And the next step is to launch pilots.

The rumors of the pilots being in Shenzhen and Suzhou are based on PBoC offices located in these cities. However, an actual pilot might be run close to home, so there is a whiff of credibility.

A couple of months ago there was another claim about an imminent launch which was followed by a rebuttal. In August Mu Changchun, head of the Digital Currency Research Institute said the PBoC was “ready” to unveil its digital currency. This was followed by the governor of the PBoC saying that despite rumored launch dates (some for November), there was no timetable for the CBDC release.

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