The Chinese Communist Party (CCP) has been pushing its digital currency project in recent years. The CCP’s central bank has been conducting research on digital currencies since 2014. In August 2019, a report by the CCP’s mouthpiece Xinhua News Agency said that the Central Bank’s Digital Currency Research Institute, established in 2017, had so far “applied for 74 patents involving digital currency technology.” Another Xinhua report in October 2019 revealed how much importance the CCP attached to digital currency and blockchain technology. According to the report, Xi Jinping, the CCP’s leader, suggested during the 18th collective study session of the Politburo that blockchain technology needs to “play a bigger role in building China into a cyber power, developing the digital economy, and helping economic and social development.”
Following that, in 2020, the CCP’s Ministry of Commerce issued a document requiring 21 provinces and municipalities to implement a “General Pilot Program for Comprehensively Deepening the Innovative Development of Service and Trade.” One of the tasks listed in the program is to “carry out digital renminbi (yuan) currency pilot projects in Beijing, Tianjin, Hebei province, the Yangtze River Delta, Guangdong-Hong Kong-Macao Greater Bay Area (GBA), and eligible pilot areas in central and western China.”
Since then there have been reports in the CCP’s media about the piloting of the digital yuan currency in a number of places, including two cities—Shenzhen and Changsha—and Hainan province in southern China. Cities in eastern China included in the program are Shanghai and Suzhou. Qingdao and Dalian are two cities from northern China to be tested with the digital currency project. Other cities and areas include Xi’an (northwestern China), Chengdu (southwestern China), and Xiongan New Area (in Hebei province, about 90 miles south of Beijing).
At the CCP’s National People’s Congress held in March this year, the CCP explicitly proposed to “build a new advantage in the digital economy” and “actively participate in the formulation of international rules and standards for digital technologies such as data security, digital currency, and digital taxation.”
With a strong push to digitize its currency, active participation in setting international standards, and the starting of testing cross-border digital payments, it is clear that the CCP’s ambitions extend beyond its national borders.