China becomes the first major economy to test drive it’s own cryptocurrency
The first real-world trial of its central bank digital currency (CBDC) is being conducted by China. The first pilot for the CBDC is scheduled for the city of Shenzhen before the end of 2019, according to local news outlet Caijing on Dec. 9, and may possibly include the city of Suzhou as well.
Four major banks and major companies such as China Telecom will be testing out the CBDC under the People’s Bank of China (PBoC).
“One move will be to select the pilot testing zone, scenario and service range in a rational manner and to continually encourage the implementation and deployment of electronic fiat currency types,” explains Caijing.
The PBoC encourages a “horse race” — that is each bank will manage the digital currency differently, competing with each other to secure the wider adoption of its model in the future. PBoC added that it might consider to include other locations in the test, although no exact details are given.
The launch makes the PBoC the first central bank in the world to release a digital currency, capitalizing on China’s moves to adopt this year’s financial technology. The move also makes China the world’s first major economy to try out their own cryptocurrency.
The currency itself has been under development for several years and was already at an advanced stage when the use of blockchain technology was officially endorsed by Beijing in October.
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