Recently, China announced that it will launch digital currency pilot programmes in three regions in the country, giving the whole project a timely boost. Over the years, China has carried out extensive research in this regard and is one of the leading countries to launch its own Central Bank Digital Currency (CBDC). According to China’s Ministry of Commerce, the three regions are the Beijing-Tianjin-Hebei region, Yangtze River Delta, and the Greater Bay Area. The digital currency pilot programmes will be launched in some major Chinese city such as Beijing, Tianjin, Hong Kong and Macau.
In order to run the pilot programmes, the Chinese government has delegated the task to the top four biggest state-owned lenders in the country. The tests will be run by Bank of China, China Construction Bank, Industrial and Commercial Bank of China, and Agricultural Bank of China and if successful, the digital renminbi will become the world’s first sovereign digital currency.
Many argue that China have predicted the possibility of an universal currency in the future as we move towards a digital age and China wants to beat others in the race. While China is not the only country running tests on a CBDC, other countries such as Japan are researching extensively too in this regard; however, it is no doubt that China is leading the race. China definitely wants to counter the dollar and to plug the yuan as the global currency. If so is the case, the digital renminbi will definitely help the Asian superpower to establish itself as a leader in the global economy. Said that, a universal currency is still years away, and can China’s renminbi establish itself as a universal currency? Only time will tell.