China's Ride-Hailing Giant Didi to Test Beijing's New Digital Currency

BEIJING--Chinese ride-hailing giant Didi Chuxing Technology Co. said it is working with the People's Bank of China to test the central bank's fledgling digital currency on its transportation platform, advancing Beijing's effort to digitize the yuan.

Didi said Wednesday that it had entered into a strategic partnership with the central bank's Digital Currency Research Institute to carry out research and test the application of the new currency. A spokesman for the central bank didn't immediately respond to a request for comment.

In April, the central bank conducted internal tests of its digital currency in four Chinese cities.

Chinese officials have previously said the new currency would share some features with cryptocurrencies including bitcoin and Facebook Inc.'s libra but would also facilitate authorities' efforts to crack down on money laundering. They have said the new currency would replace part of the nation's monetary base--cash in circulation--and wouldn't replace money supply, such as bank deposits and balances held by payment platforms.

The new currency doesn't have an official name but has been referred to in central-bank documents by the cumbersome label "digital currency/electronic payment," or "DC/EP."

A Didi task force will work with the central bank's research institute to design and implement pilot DC/EP projects that meet the PBOC's security and governance standards, the tech company said, without disclosing any further details on the cooperation.

The partnership between Didi, which dominates the ride-hailing market in China, and the central bank suggests that early tests with the digital currency are moving forward after the experiment in the Chinese cities earlier this year. Under that pilot program, some civil servants received some of their salary in the digital currency. The PBOC has been doing research into a digital currency since 2014.

PBOC Gov. Yi Gang said last month that Beijing didn't have a timeline for rolling out the currency more broadly, which he referred to as being under research and experiment.

China has been a pioneer in digital and electronic payments among the world's major economies. Smartphone payments are widely used in Chinese cities, thanks to financial services provided by Chinese tech companies.

Chinese consumers, who have gotten used to paying for even small items at convenience stores with their smartphones, are ready to embrace a digital currency that shares features with the current system of smartphone payments, experts and officials say.

Grace Zhu contributed to this article.

Write to Jonathan Cheng at jonathan.cheng@wsj.com


  (END) Dow Jones Newswires
  07-08-20 0724ET
  Copyright (c) 2020 Dow Jones & Company, Inc.

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