The four major banks are conducting large-scale internal testing. When will the central bank's digital currency be launched?

On August 5, media reported that several people from large state-owned banks said: The four major banks are conducting large-scale testing of digital wallet applications in Shenzhen and other places, preparing for the official launch of digital currency.

As soon as the news came out, it triggered a lot of heated discussions. Digital currency seems to be quickly being pushed onto the agenda.

The digital currency app is currently in beta testing

The news was not unexpected.

As early as April 14 this year, news that the Agricultural Bank of China was conducting internal testing of the central bank's digital currency DC/EP wallet circulated on the Internet. At that time, some analysts speculated that in addition to the Agricultural Bank of China, several other large state-owned banks had also completed the corresponding internal testing wallets and would open them one after another.

Now, the news has been further confirmed.

According to a person from a large state-owned bank, the digital currency is led by the central bank, and banks have been testing the implementation scenarios for several months. In recent days, the four major banks, Industrial and Commercial Bank of China, Agricultural Bank of China, Bank of China, and China Construction Bank, are testing the "Digital RMB" App on a large scale. Considering system load and other reasons, it is still in the internal testing stage. "The App cannot be downloaded publicly for the time being, and there is an identity code after opening it." The other party said that some internal employees of some large banks have already started using it for transfers, payments, and other scenarios.

A person from another major bank also said: "The App is still in testing and has not been widely promoted, such as using the 'Digital RMB' App to transfer money."

Many people in the banking industry have reported that the internal testing of digital currency is mainly carried out in Shenzhen and other areas, which is basically consistent with the information released by the Digital Currency Research Institute of the People's Bank of China.

Last month, Shenzhen issued the "Action Plan for the Implementation of Shenzhen City" for the "Opinions on Financial Support for the Construction of the Guangdong-Hong Kong-Macao Greater Bay Area". The plan stated that it will "actively participate in, support, and coordinate the application of the People's Bank of China's digital currency in various scenarios in the Shenzhen pilot"; and on August 3, the central bank held a video conference on work in the second half of 2020. The meeting pointed out that in the first half of the year, the "closed pilot of legal digital currency has been successfully launched", and in the second half of the year, it will "actively and steadily promote the research and development of legal digital currency."

There is no doubt that China's digital currency journey is being vigorously advanced.

Governments and enterprises in many places jointly promote cooperation

The news that the central bank is conducting internal testing of digital currency has attracted the attention and cooperation intentions of many local governments.

Today, there is news that Julu County, Hebei Province has applied for the central bank's digital currency for the issuance of environmental protection and other subsidies. According to Bo Sheng, the founder of Lezhi Technology, his company has jointly developed an app with Julu County, Hebei Province, which includes the issuance of various subsidies such as gas and electricity replacing coal, poverty alleviation funds, education, and the purchase of agricultural materials and furniture. Based on these decentralized application scenarios, a blockchain multi-party signature system has been developed. Recently, it has also applied for the issuance of subsidies using the central bank's digital currency. Local residents can receive subsidies in the form of DE/EP as early as this year.

At the beginning of July, Suzhou’s three national strategic pilot projects of digital credit investigation experimental zone, digital currency, and financial technology innovation supervision proposed to promote the digital transformation of core blocks through “smart business district” services, integrate digital currency applications, and improve the level of intelligent services; at the end of the same month, Hangzhou also proposed that in the process of accelerating the pilot promotion of the central bank’s digital currency, it is encouraged that enterprises actively strive for and take the lead in carrying out the settlement pilot of the central bank’s digital currency.

In addition to the government, many companies have stated that they have or plan to cooperate with the central bank's digital currency.

Internet company Didi Chuxing said it has reached a strategic cooperation with the Digital Currency Research Institute of the Central Bank to jointly explore scenario innovation and application of digital RMB in the field of smart travel; some media reported that the People's Bank of China has completed talks with Meituan in Beijing to discuss the trial plan of the central bank's digital currency and plans to promote the central bank's digital currency on all platforms; video playback website Bilibili and ByteDance and other companies have also stated that they are actively promoting participation in digital currency cooperation.

Bloomberg previously reported that in addition to leading Internet companies, after the central bank's digital currency conducted internal closed pilot tests in Shenzhen, Suzhou, Xiongan, Chengdu and the future Winter Olympics scenarios in April this year, the digital currency was also piloted in 19 merchants including McDonald's and Starbucks.

Internal testing, but not officially launched

According to relevant data, in 2019, more than 80% of central banks have participated in digital currency research, more than 40% of central banks have entered the digital currency pilot stage, and nearly 10% of central banks are close to the implementation stage.

In addition to the four major banks, Postal Savings Bank of China and Bank of Communications are also actively participating in the implementation of DCEP. In addition, Alibaba and Tencent have participated in related research and development work, and Huawei has also provided technical support for the project.

According to relevant sources, registration for the "Digital RMB" App requires opening a digital wallet in the four major banks. The digital wallets are linked to the accounts of each bank, and users can recharge funds into the wallets; the recharge method can be selected from online banking recharge, card binding recharge, etc.; it can realize functions such as recharge, withdrawal, transfer, and scan code consumption. Among them, transfers can be made only with the other party's mobile phone number, and the function of offline transfer is being tested.

In addition, according to previous news from 21 Finance, a person in the banking industry revealed that the Bank of China has identified several internal scenarios for piloting digital currency in a project called "Project 321". After many preliminary tests and preparations, the internal pilot conditions are basically mature. Currently, some internal payment scenarios have been piloted in the bank's internal App in Shenzhen and other places.

However, the specific time for the launch of the "Digital RMB" App has not yet been announced.

The Digital Currency Research Institute of the Central Bank has stated that the DC/EP information currently circulating online is a test content in the process of technical research and development, and does not mean that the digital RMB has been officially launched. The current closed testing of the digital RMB will not affect the commercial operation of listed institutions, nor will it have an impact on the RMB issuance and circulation system, financial markets and social economy outside the testing environment.