Digital yuan trial coming to China’s Suzhou City

Getting your Trinity Audio player ready...

The city of Suzhou is to become the next city to trial China’s digital yuan, with administrators preparing to roll out central bank digital currency infrastructure in the coming weeks.

Beginning December, residents across the city will receive the central bank digital currency in so-called “red packets,” with 50,000 packets of the digital currency to be given away through a local lottery.

The trial will take place on December 12, China’s ‘Double 12’ shopping holiday, which represents one of the busiest retail days of the year, according to local media reports. The test builds on previous trials in the city, which saw state employees paid travel expenses in digital yuan.

The trial will follow a similar model to that deployed in Shenzhen back in October, which saw $1.5 million in digital currency enter circulation. Residents who won digital currency in the lottery were permitted to spend it across 3,000 stores in the city which had signed up to participate in the trial.

The Suzhou trial will experiment with offline payments for digital yuan, exploring a mechanism that allows transactions to be completed by touching two devices, via near field communication (NFC). This would not require an online connection, and could present further opportunities for payments in digital yuan when the currency rolls out across China more widely.

The trial in Suzhou coincides with similar measures in progress in Chengdu, which is currently engaged in testing digital currency wallets.

According to reports, one of the country’s leading banks, the Industrial and Commercial Bank of China, has been advertising wallet features for users in Chengdu, thought to be part of another localized pilot scheme.

The trials are the latest in China’s march towards a nationwide launch, with the country thought to be the most advanced of all major global economies towards rolling out a digital currency.

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 on Better Payments: Improving the Consumer Experience with Bitcoin