While many world economies are still working on their digital currency model, China has already taken a lead. The country is already running pilot for its e-currency, DCEP (Digital Currency/Electronic Payment), across Shenzhen, Suzhou, Chengdu, Xiong’an and Beijing, stated a top official.
During a panel discussion on ‘The Future of Banking’, Bank of China, India CEO, Hu Beihei said, “The application of DCEP has been expanded to hospitals, subways, online shopping, etc. DCEP was also tested on China’s food delivery and daily deal platform Meituan and China’s biggest car hailing platform Didi, both of which have hundreds of millions of users.
He added that the pilot of this currency will continue as it gets adapted to various technologies.
In Beijing, as part of the pilot, 50,000 DCEP red envelopes were issued to individual consumers by drawing lots. “The amount of each DCEP red envelope was 200 yuan (approximately equal to Rs 2,200).”
After downloading the DCEP mobile app and opening their personal digital wallets, these 50,000 consumers can directly receive and use the red envelope without linking the wallet with any bank accounts.
The transaction of the e-currency can take place in the designated 800 offline shops or 2,300 online retailers.
The system is designed in a way where the currency is stored in a digital wallet (an application on the smartphone) or physical card, and can be put into use directly without bank accounts. The transaction can be made offline as well (without internet unlike e-payment).
Commenting on this currency, which is cheaper than that of issuing currency, Beihei stated the payer and payee doesn’t have to rely on a clearing system, as the process of payment leads to automatic settlement.