The orderly expansion of digital renminbi trials in China is expected to advance its research and development and wide-range applications, experts said on Monday, as the nation works to build a robust ecosystem for its digital currency, or e-CNY.
Among the third group of regions chosen for e-CNY trials are Tianjin, Chongqing, and Guangzhou, Guangdong province.
The People’s Bank of China, the central bank, released the list of new regions for e-CNY trials on Saturday. Also among them are Fuzhou and Xiamen in Fujian province, and the six cities relating to the 19th Asian Games to be held in Zhejiang province in September－Hangzhou, Ningbo, Wenzhou, Huzhou, Shaoxing and Jinhua.
Zhangjiakou, Hebei province, and Beijing have also been added to the list.
“It’s perfect timing to expand the trial regions in an orderly manner, since the digital renminbi trials have formed a number of replicable application models in fields such as retailing, catering, and culture and tourism,” said Zheng Lei, deputy head of International New Economic Research Institute.
“With more regions joining in the piloting, the digital yuan will become increasingly accessible in daily life,” he said.
Analysts have said that the expansion of piloting will help test e-CNY’s functioning and security more thoroughly and at a greater scope.
According to Su Xiaorui, a senior analyst at the Analysys consultancy, the digital renminbi is likely to have more application scenarios in sectors such as travel, e-commerce, and retailing, while gradually increasing its presence in industrial supply chain financing, enterprise-level trade, and some other real economy sectors, thanks to the increasing piloting.
Zheng said the digital yuan is expected to be used beyond retail payment scenarios in the near future after more tests are conducted in China’s banking system.
“The current tests focus primarily on the digital renminbi’s functioning in consumer payments and have been making steady progress,” he said.
“After a large number of tests at the central bank and commercial banks, a complete issuance and circulation cycle of digital renminbi is expected to be formed for it to enter wide use.”
China has steadily advanced e-CNY research and development in recent years. The outlines of the 14th Five-Year Plan (2021-25) for National Economic and Social Development and the Long-Range Objectives Through the Year 2035 have included that task, and more than 10 provincial regions have declared their ambition to pilot digital renminbi services.
Before the third-round of pilot regions, China made the digital yuan accessible in 10 pilot regions as well as the venues of the Beijing 2022 Winter Olympics. Those 10 regions included Shenzhen, Shanghai, Suzhou in Jiangsu province. Hainan was the only provincial-level trial region.
By the end of 2021, 261 million digital yuan wallets had been opened by individuals and the transactions had totaled around 87.57 billion yuan ($13.76 billion), according to the PBOC.