China plans to use its new digital currency during the Winter Olympics in Beijing in 2022.
This is reported by Reuters, citing the head of the monetary policy department at the People’s Bank of China (PBoC), Sun Guofeng, as a source.
Reuters reveals that Sun has stated that the PBoC has not yet decided when it will launch its CBDC on the market, but that it is likely that the launch will take place before the 2022 Winter Olympics, since the intention is to use it during the sporting event.
At first, when the field tests were announced, it was thought that the Chinese DC/EP (Digital Currency / Electronic Payments) could be launched on the market as early as 2020, but these new statements by Sun suggest that it may take longer.
China, testing in progress but unclear timeframe for the digital currency
After all, although the tests have been going on for several months now, the PBoC never wanted to reveal the planned launch date, probably because, as Sun confirmed, this date has not yet been decided.
However, despite the fact that the ongoing tests would not have generated any particular problems, Sun’s words sound a bit like a postponement, as if they had decided to take more time for field testing.
Furthermore, yesterday it was discovered that the current tests are focused only on small retail transactions, i.e. they have not yet been extended to scenarios that require large volume transactions. It is therefore quite possible that the PBoC has decided to continue with the tests, probably with a view to extending them to different uses than those tested so far.
The DCEP, according to official statements, is the same thing as the legal tender Yuan, so much so that it can be converted to Yuan, and so the tests most likely concern only the functioning of the technology infrastructure at the basis of this important innovation.
In particular, the professor of Gaoling School of Artificial Intelligence at Renmin University, Wang Peng, said:
“At its current stage, the test’s primary goal is to ensure the digital currency’s operation runs smoothly and safe, and to determine how DCEP is distributed from the central bank to financial institutions. Only when trials in retailing are successful will they be carried out in large transaction scenarios”.
In light of this, it is possible to imagine that the PBoC still needs several months of testing before it can announce the market launch of DCEP, and it is also possible that the tests conducted so far may have resulted in some issues. In fact, these tests with small transactions have been going on for several months now, and it sounds a bit strange that they have not yet given enough positive results to be able to move on to the next phase.