Accompanying the pilot is the construction of a legal digital currency test zone and digital financial system
The Beijing Local Financial Supervision and Administration, together with the Tongzhou District Government, hosted a conference last Monday that highlighted the People’s Bank of China (PBC) — Digital Currency Research Institute’s plans to construct a legal digital currency test zone and a digital financial system in the capital city of China. These initiatives would fall under the China (Beijing) Pilot Free Trade Zone Overall Plan.
There were plans to test the digital yuan in Beijing that were discussed last August, but the presence of this discussion at the regional-level conference shows that the pilot is classified as a part of state-level planning, as is noted in the policy document regarding the pilot free trade zone in Beijing and other cities.
A report made by Sina, a Chinese media outlet, revealed that the conference also discussed the implementation of the country’s “two districts” policy. This included increased leniency in terms of market access for foreign financial institutions, the development of green finance and international wealth management, as well as the launch of digital currency experiments.
The government of China has planned its pilot for the central bank digital currency (CBDC) in Beijing to follow a similar pattern as its pilot program in the city of Shenzhen, where authorities gave away $1.5 million worth of the digital currency to citizens.
There have been some reports citing how users have not been thoroughly satisfied with the digital yuan at the moment. Two million people applied for a share, which was 200 digital yuan ($30). However, an applicant explained that the option felt less convenient and he would not choose to use the CBDC again unless it was handed out through another giveaway. Another applicant stated that the infrastructure of the digital yuan was similar to the digital currencies from Alipay and WeChat, which have been “out for a long time”.
Governor Yi Gang from the PBC has announced that the digital yuan trials have successfully completed over four million transactions, which was worth around $299 million in total.
This proposal to expand the trials on the digital currency to Beijing is also aligned with the rollout strategy that was given by the Commerce Ministry in China. A report released by Bloomberg News last August revealed that the tests on the digital yuan will also most likely be held in certain areas of northern China, such as the Tianjin and Hebei Province, and the city cluster in the Yangtze River Delta region, including Shanghai.