E-CNY launch not set; trials will focus on more use scenarios, applications
China published its first report on the progress made in the ongoing research and development of its digital currency known as e-CNY on Friday, indicating the project's pilot programs will be expanded and fine-tuned based on the experiences so far.
The People's Bank of China, the central bank that is pioneering the digital currency project, said there is no preset timetable for the final launch.
More scenarios, it said, will be included in the testing program. PBOC officials said the next key trial will be the upcoming Beijing Winter Olympic Games in February 2022.
Related e-CNY applications will include unmanned vending carts, automated vending machines and worker-free supermarkets.
Wearable devices like gloves, badges and Olympic uniforms with payment functions have been developed, said Fan Yifei, the PBOC's deputy governor.
Friday's publication of the report titled "Progress of Research and Development of e-CNY in China" does not mean the PBOC will launch the digital RMB any time soon. But, the program and related information will be continually updated, said Fan.
Topics for further research projects will be identified. The e-CNY's potential impact on monetary policy, financial system and financial stability will likely receive attention, he said.
The central bank will continually improve the e-CNY ecosystem, and continue to explore new application models as well as optimize the design of the e-CNY system, the PBOC report stated.
More works will be undertaken to improve the management of security of the e-CNY operational system, based on the country's central bank law, covering aspects like security of passwords, financial information and data, and business continuity, to ensure the safety and stability of the e-CNY system will remain intact under all circumstances, the report stated.
"Meanwhile, the PBOC is willing to participate actively in international exchanges of views on digital fiat currency and discuss standard-setting in an open and inclusive manner, in order to jointly advance the development of the international monetary system."
Besides, the PBOC will continually promote the e-CNY's cross-border usage. It will also respond to initiatives of G20 and other international organizations to explore pilot cross-border payment programs.
The central bank will work with monetary authorities in other countries to set up exchange arrangements and regulatory cooperation mechanisms on digital fiat currencies, the PBOC report disclosed.
Foreigners with no bank account in China can enjoy basic financial services provided via e-CNY wallet. Foreign residents temporarily traveling in China can open an e-CNY wallet to meet daily payment needs without having to open a bank account in China.
The report also clarified that "the PBOC lies at the center of the e-CNY operational system". It will issue e-CNY to authorized operators like commercial banks, and manage the e-CNY through its whole life cycle. Authorized operators and other commercial institutions will exchange and circulate e-CNY to the public.
In China, the e-CNY will co-exist with paper cash in the long term, said Luo Rui, head of the PBOC's Currency, Gold and Silver Bureau.
According to Mu Changchun, director-general of the PBOC Digital Currency Research Institute, the trading layer of the digital RMB payment system has adopted a centralized structure. In the distribution layer, a unified distributed ledger is constructed based on the so-called alliance chain technology, a type of blockchain technology.
This technology can both protect the privacy of personal data, and avoid financial data security risks caused by general distributed ledger technology, said Mu.