China’s CBDC Completes Test Transactions
Last updated on November 1st, 2022 at 12:50 pm
Unless you’ve been sticking your head in the sand, you’ve probably heard about Central Bank Digital Currencies (CBDC).
You’ve likely also heard that China is leading the way with regard to this particular currency option… heck, we reported it on our blog, read more about it here.
Let’s be honest, it’s the way of the future for all currency…
Let’s also be honest about the fact that if you are involved in the cryptocurrency space, then you believe digital assets are the future as well.
But, while those of us who prefer Bitcoin and other cryptocurrency primarily because of it’s decentralized nature, these CBDC’s are not quite the same. They are completely centralized and controlled by the Central Bank which issues them.
Reports are out that the People’s Bank of China tested its CBDC on small retail transactions, although there are rumors the test was carried out on a larger scale as well. The blockchain-based service network is still exploring further developments.
There have been several reports claiming the Chinese central bank is testing its CBDC with voluminous transactions.
However, recently, the bank revealed that it wants to concentrate on small retail transactions and confirmed there are ongoing trials in small measures in different regions of the country.
Chinese CBDC Testing Stage
For the past few weeks, reports have been flying around that China had tested its CBDC with a huge transaction volume to get an estimate on the number of transactions it can take.
Also, there were rumors that Shenzhen, a city in the Guangdong province in South China, was in support of the use of the Chinese digital currency. This came after claims by some Chinese citizens that they sold their local property and received a large volume of digital currency from a bank.
But, the Global Times said the rumors were unfounded by citing the PBoC in a report. The Global Times explained that the CBDC has not been tested in large retail transactions. The local news outlet concurred that the Chinese financial authority tested the CBDC, but it was only in small transactions.
“At its current stage, the test’s primary goal is to ensure the digital currency’s operation runs smoothly and safe,” Global Times stated.
The main idea is to find out how the central bank can distribute the CBDC to financial institutions.
Wang Pen of the School of Artificial Intelligence at Renmin University also supported the report on the trial of small volumes.
“The transactions of CBDC will only be carried out in large volumes only when the test trial on small transactions is successful,” he commented.
Trial Carried Out in Different Provinces
Indeed, the pilot test of the CBDC was carried out in several different provinces in China. The test areas include the Xiongan New Area in Hebei Province, Chengdu (capital of China’s Southwest province Sichuan), Suzhou (East china’s Jiangsu province, as well as in Shenzhen.
The Shenzhen subsidiary has been active recently. After advertising for the post of multiple positions for research and blockchain development engineers, the local research team has been beefed up with several team members.
BSN Facilitating CBDC Development
China is not stopping at the testing stage for its CBDC, as it plans to develop its digital currency a bit further to encourage mass acceptance and improve its transaction facilitating benefits.
The Chinese Blockchain Service Network (BSN) is also aiming to reduce the costs of blockchain development. BSN has been very busy with several partnerships. After collaborating with NEO and integrated Chainlink into its service, Yifan He from Red Date Technology revealed the merits of BSN in a recent post.
In the post, he explained the case for BSN, saying it’s now easier and cheaper for everyone as the cost is brought down to nearly zero. Yifan added that the main goal of BSN is to develop as a massive interoperable environment. He concluded that the BSN platform is capable of integrating stablecoins like Tether as soon as next year.
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