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Digital yuan pilot testing is moving to Southern China. The central bank digital currency’s latest test will be in Hainan province where the central bank has partnered with a local bank and the municipal government to conduct the digital currency pilot.

The People’s Bank of China continues to test the digital yuan in various Chinese cities as it braces for a possible 2022 launch. It has already conducted pilot tests in Beijing, Shenzhen, Suzhou and Shanghai. It has also partnered with the Hong Kong Monetary Authority to test cross-border payments between Hong Kong and the neighboring Guangdong Province.

In its latest test, the PBoC has partnered with the Industrial and Commercial Bank of China’s Haikou branch and the Sansha city municipal government. The three will specifically target Yongxing Island in Sansha city to experiment and promote the digital yuan.

The PBoC will give away 99 yuan ($15) for every 100 yuan purchase on the island, which is home to a few thousand people. This will include all purchases on supermarkets, restaurants and hotels.

This is the latest effort by the Chinese government to pave the way for digital yuan usage in the world’s most populous nation. A week ago, six of the country’s leading banks started to accept invitations from select individuals to open up digital yuan wallets. The trial run is limited to Shanghai and Beijing.

“Although the application criteria has not loosened up, we’ve opened it up to the public so the process is less restrictive than before. As the review process goes digital, the speed of getting applications approved will be much faster later on,” a PBoC official noted.

The director of the PBoC’s Digital Currency Research Institute also recently revealed more details about the digital yuan. One of these was that the CBDC would be private, but not anonymous. “The anonymity of the central bank’s digital currency is limited anonymity under the premise of controllable risks. A completely anonymous central bank digital currency is not feasible,” the official stated.

China is still leading the CBDC race. However, some of its neighbors are waking up to the possibilities such a currency has. Japan recently launched the first phase of its CBDC study, while India has proposed a draft law that legalizes a digital rupee.

To learn more about central bank digital currencies and some of the design decisions that need to be considered when creating and launching it, read nChain’s CBDC playbook.

See also: CoinGeek Live panel, The Future of Banking, Financial Products & Blockchain

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