Digital yuan to be tested by Tencent-backed firms in China

China is preparing to test its digital yuan through online food retailer Meituan-Dianping, a firm backed by WeChat owner Tencent.

In the latest development on its journey to launching a central bank digital currency, the People’s Bank of China has already met with the Beijing company to discuss proposals for a trial, which would see the currency rolled out across the platform, Bloomberg reported.

In addition, discussions are ongoing with ride hailing platform Didi Chuxing and video-streaming service Bilibili, both firms that have previously received backing from Tencent.

Sources close to the matter were quoted saying the proposals are at an advanced stage, with plans imminent for rolling out the digital yuan across pilot schemes as soon as possible.

With over 400 million active users, Meituan-Dianping is one of the world’s largest food delivery platforms, with revenue in excess of RMB97.5 billion (approximately $14 billion).

The news means Tencent is likely to be one of the main issuers of the digital yuan once the currency is launched by the bank.

Initial testing is already underway, with Chinese authorities rolling out pilots across four cities across the country in recent months. With more commercial partners like Tencent on board, there will be greater scope for testing the currency at scale, ahead of a future national rollout.

While it is anticipated that China could still be some way from an official launch of a digital currency, the country is regarded as being ahead of other global powers in developing a central bank digital currency.

The latest developments come at a time when central banks elsewhere are still in the early stages of exploring the technology, including in the U.S., the U.K. and the European Union.

While the exact scope of the collaboration remains unclear, the proposals are expected to bring China closer to being able to launch their digital currency.