Page 7 - South China Business Journal
P. 7
ording to a November 2 speech by Yi Gang, At the end of October, the Chinese Communist
the deputy governor of PBOC, more than RMB 2 Party’s recommendations on the long-term plan
billion (US$299.07 million) had been spent using for the economy through 2035 emphasized again to
digital yuan in four million separate transactions in “steadily advancing digital currency research and
China. Residents used multiple payment methods, development.”
including bar code, facial recognition, and tap-to- Externally, the country is seeking a seat at
go transactions. the global digital-currency table. Over the last
Private sector involvement few months, Chinese President Xi Jinping has
The private sector is keen to get involved in the stressed the need for China to get involved in the
DCEP test. The country’s biggest ride-hailing development of global standards and rules related
company Didi Chuxing, food delivery giant Meituan to digital currencies. In a speech at the G20 summit
Dianping, and streaming platform Bilibili were on November 21, he called for the organizations “to
reported to be joining hands with banks to explore discuss developing the standards and principles
applications of the DCEP. for central bank digital currencies with an open
JD.com, one of China’s biggest e-commerce giants, and accommodating attitude, and properly handle
has become the country’s first virtual platform all types of risks and challenges while pushing
to officially accept digital yuan, according to the collectively for the development of the international
company’s announcement on December 5. The monetary system.”
company’s fintech arm JD Digits will accept digital How does China’s DCEP run and what does
yuan as payment for some products on its online it look like?
mall, as part of the December digital currency pilot China’s central bank is responsible for issuing and
program in Suzhou. distributing the digital yuan to commercial banks.
Legal and institutional catch-up Commercial banks will then channel the digital
Apart from the test trials, the country’s law is money to end users. So far, China’s four major
also catching up. On October 23, 2020, the PBOC state-run banks – China Construction Bank, Bank
published the revised draft of the People’s Bank of of China, Industrial and Commercial Bank of China,
China Law, laying the legal foundation for sovereign and Agricultural Bank of China – have started large-
digital currency. The draft law proposed that scale internal testing of the digital RMB wallet.
legitimate currency can be digital currency, giving In late August, China Construction Bank (CCB)
digital yuan, the same legal status as physical yuan, opened a digital RMB wallet service in its official
and any institution or individual must not produce app but quickly disabled it after the feature gained
or sell digital tokens to prevent risks associated widespread attention – probably by accident.
with virtual currencies. However, the temporary launch offered a glimpse
of what a digital RMB wallet could look like.
SOUTH CHINA BUSINESS JOURNAL 4
the deputy governor of PBOC, more than RMB 2 Party’s recommendations on the long-term plan
billion (US$299.07 million) had been spent using for the economy through 2035 emphasized again to
digital yuan in four million separate transactions in “steadily advancing digital currency research and
China. Residents used multiple payment methods, development.”
including bar code, facial recognition, and tap-to- Externally, the country is seeking a seat at
go transactions. the global digital-currency table. Over the last
Private sector involvement few months, Chinese President Xi Jinping has
The private sector is keen to get involved in the stressed the need for China to get involved in the
DCEP test. The country’s biggest ride-hailing development of global standards and rules related
company Didi Chuxing, food delivery giant Meituan to digital currencies. In a speech at the G20 summit
Dianping, and streaming platform Bilibili were on November 21, he called for the organizations “to
reported to be joining hands with banks to explore discuss developing the standards and principles
applications of the DCEP. for central bank digital currencies with an open
JD.com, one of China’s biggest e-commerce giants, and accommodating attitude, and properly handle
has become the country’s first virtual platform all types of risks and challenges while pushing
to officially accept digital yuan, according to the collectively for the development of the international
company’s announcement on December 5. The monetary system.”
company’s fintech arm JD Digits will accept digital How does China’s DCEP run and what does
yuan as payment for some products on its online it look like?
mall, as part of the December digital currency pilot China’s central bank is responsible for issuing and
program in Suzhou. distributing the digital yuan to commercial banks.
Legal and institutional catch-up Commercial banks will then channel the digital
Apart from the test trials, the country’s law is money to end users. So far, China’s four major
also catching up. On October 23, 2020, the PBOC state-run banks – China Construction Bank, Bank
published the revised draft of the People’s Bank of of China, Industrial and Commercial Bank of China,
China Law, laying the legal foundation for sovereign and Agricultural Bank of China – have started large-
digital currency. The draft law proposed that scale internal testing of the digital RMB wallet.
legitimate currency can be digital currency, giving In late August, China Construction Bank (CCB)
digital yuan, the same legal status as physical yuan, opened a digital RMB wallet service in its official
and any institution or individual must not produce app but quickly disabled it after the feature gained
or sell digital tokens to prevent risks associated widespread attention – probably by accident.
with virtual currencies. However, the temporary launch offered a glimpse
of what a digital RMB wallet could look like.
SOUTH CHINA BUSINESS JOURNAL 4
