The experimental test of China’s sovereign digital currency is currently focused on small retail transactions and hasn’t expanded to large volume transactions yet, said the country’s central bank as reported by local media.
The central bank gave the explanation following the rumors that a housing transaction of large volumes in Shenzhen supported the use of Digital Currency Electronic Payment (DCEP).
An unnamed employee of the People's Bank of China (PBoC) clarified that the digital yuan is the same as fiat currency in legal tender and is a two-way convertible with banknotes in a 1:1 ratio.
The pilot tests of China's Digital Currency Electronic Payment (DCEP) are ongoing in Shenzhen, Chengdu, and the Xiongan New Area after the country speed up its research and development in the recent years “in a bid to win the global race to launch one and against the backdrop of strained relations with the US.”
The Shenzhen subsidiary of the central bank’s digital currency research unit has also ramped up it's hiring with more recruitment positions for blockchain development and research engineers posted earlier this month.
More Chinese cities are expected to join the trials next year. Earlier this month, China's Ministry of Commerce also shared that it will launch DCEP’s pilot test in more “qualified localities” in the Yangtze River Delta, the Beijing-Tianjin-Hebei Region, the Guangdong-HK-Macao Greater Bay Area, and central and western China.