Yesterday a screenshot emerged showing an online wallet used in testing China’s central bank digital currency (CBDC). The wallet referred to the Agricultural Bank of China (ABC), one of China’s big four state banks, which is known to be involved in piloting the digital Yuan, also referred to as DCEP (digital currency / electronic payment).
Some reports state that the app is only accessible to customers on a whitelist in four regions, Shenzhen, Xiong’an, Chengdu and Suzhou. Update: news has emerged of a specific DCEP application in Suzhou and Chinese state media confirmed these locations and described how it works. And four months later a screenshot of China Construction Bank’s app was revealed.
The payment functionality in the app includes the ability to make retail payments by scanning a barcode, to send money, request a payment and touch phones for p2p payments.
In terms of wallet management, users can manage funds, link the wallet to other accounts and review all transactions.
It’s been four months since the news first emerged that CBDC pilots would be starting, although shortly afterward this was downgraded to “internal testing“. At the time, it was stated the trials would involve the big four state banks, three telecoms companies and Huawei. It was also expected that Tencent’s WeChat Pay would participate as one of the dominant incumbent wallet providers and it has a digital currency unit.
Two months ago, another report emerged outlining 22 companies involved in the project, including the eight previously mentioned and Tencent. Oddly, the list did not include AliPay, the biggest current digital payments firm. Contradicting this is AliPay’s application for numerous patents relating to central bank digital currency.
More recently, news emerged that testing of the digital currency was all but complete, and all that remained was a change in legislation required for the central bank digital currency to go ahead.
Meanwhile, just last week, Yao Qian, a Director at the China Securities Regulatory Commission (CSRC), wrote an article arguing that at the retail level, there should be competition in the distribution of digital currency, and blockchain could be used at the periphery.
Elsewhere, other countries are also continuing to explore central bank digital currencies, despite the COVID-19 crisis. And, in fact, CBDC could have helped to distribute COVID-19 aid.