Shenzhen will be the testing grounds for China’s fascinating digital currency ambitions, this according to a central government document. As reported by Beloit Bulletin, September 30, People’s Bank of China (PBoC) plans to launch a significant research effort pertaining to the development of China’s national digital currency and others with hopes of fostering significant urban development to nearby regions such as Hong Kong and Macau.
Chinese Digital Currency
Shenzhen, a city often referred to as China’s Silicon Valley, will enjoy guidance from China’s central bank to develop innovative digital payments solutions based on blockchain technology.
The project has desires to boost the development of Guangdong Province while preserving Chinese socialism orientation.
However, it is not clear what kind of digital currency will be used for the projects. According to rumors, the PBoC, Chinas central bank, is supposed to be involved through its newly released unit: the “digital currency for electronic payments” (DC/EP).
Economics and Finance Professor at Central University, Huang Zhen, believes Shenzhen is the best area to launch the pilot as the region is home to many blockchain companies with proven competence and working products. Huang added that the pilot may also bring significant benefits with other major zones such as the Hong Kong Special Administrative Region (SAR) and Macao SAR. In this scenario, three of the most technology-advanced digital cities in the world will be the leading drivers on the new Chinese digital currency, allowing for great worldwide exposure.
The new project is wholly government-run as the company developing it is owned by PBoC.
According to other industry insiders such as Mu Changchun, Deputy Director of the payments and settlement department at the PBoC, the bank is allegedly researching this project since 2014.
The effort of the PBoC in the development of the new digital currency has led to the application of 74 new patents recorded by the National Intellectual Property Administration.
The Chinese government is working hard to control digital currency projects inside the country. After the infamous 2017 ban of initial coins offerings (ICOs) and the decision to stop direct trading between bitcoin and yuan, which was rapidly booming at the time, the Chinese government understood the disruptive potential of the technology. PBoC is in fact of the first leading central banks to readily research cryptocurrency projects and may achieve a great competitive advantage from it, surprisingly.