(Kitco News) - China continues to lead the way in the development of a central bank digital currency (CBDC) with a recent report in the Workers’ Daily newspaper indicating that the ongoing pilot program for the e-CNY will soon expand to new regions in the country.
According to the report, the cities of Jinan in the Shandong Province, Nanning and Fangchenggang in the Guangxi Zhuang Autonomous Region, Kunming in the Yunnan Province, and the Xishuangbanna Dai Autonomous Prefecture will be added to the pilot program in the near future.
The new additions will bring an additional layer of complexity to the e-CNY system being developed as they are somewhat less technologically advanced when compared to the first batch of pilot cities, which are home to multiple IT and financial powerhouses.
Jinan, for example, is a major rail hub and an up-and-coming industrial center in Shandong. It is also popular with tourists due to its natural beauty. Yunnan’s economy is comprised of more traditional industries such as tobacco producers, agricultural firms, mining companies, and tourism operators. Guangxi, which borders Vietnam, is famous for its rice production and mineral reserves.
As part of the expansion to new regions, the Bank of China is offering residents in the newly added pilot areas a consumer gift package worth 80 yuan for anyone that completes registration with the designated app.
The gift package can be used at a variety of outlets either online or at a store's physical location. Potential uses include buying groceries, movie tickets, daily necessities or dining coupons in stores. The goal of the gift package is to promote the use of the e-CNY in the new pilot areas and to contribute to local economic development.
In September, China announced the expansion of the e-CNY pilot program to the provinces of Guangdong, Jiangsu, Hebei and Sichuan after originally launching the first trials in the cities of Shenzhen, Suzhou, Xiongan and Chengdu in 2020.
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| China's e-CNY has been used to pay a 51 million yuan land transfer fee |
Kazakhstan to roll out its CBDC by 2025
The country of Kazakhstan has announced that following the second phase of testing of its CBDC, the digital tenge, the National Bank of Kazakhstan (NBK) has determined that launching its own digital currency would be beneficial to the citizens of the country as well as its banking infrastructure.
According to a rough translation of the report, “Taking into account the need for technological improvements, infrastructure preparation, development of an operating model and a regulatory framework, it is recommended to ensure a phased implementation over three years.”
Over the next two years, the country "will develop solutions for launching into industrial operation," and will cooperate with other central banks on cross-border and currency-exchange operations, the report said.
In October, the Financial Monitoring Agency of the Republic of Kazakhstan revealed that it had signed a memorandum of understanding with the cryptocurrency exchange Binance to formalize their shared interest in developing the digital asset market in the country, which included launching the digital tenge on BNB Smart Chain, the blockchain network developed by Binance.
The NBK has recommended making the e-tenge available as early as 2023 with a phased expansion of functionality and introduction into commercial operation through to the end of 2025. Kazakhstan is currently the world’s third-largest Bitcoin mining hub behind the U.S. and China, and citizens of the country have generally shown a higher level of familiarity with cryptos than most.
