Leading the race of central bank digital currency (CBDC), China's central bank has already tested the digital yuan in several cities, including Shenzhen, Chengdu, Suzhou, and Xiong'an.

Still, there is no specific timeline for the CBDC’s official rollout, said central bank vice governor Li Bo in an annual gathering on Sunday of top Chinese and foreign policymakers, executives, and academics.

Li said the trials have shown that the issuance and distribution mechanism of the e-CNY are compatible with the existing financial system.

China will also continue to improve the digital currency’s ecosystem, enhance its security and reliability, and set up a set of the legal and regulatory framework; he further shared at the Boao Forum, which was canceled last year due to COVID-19, in the country's southern island province of Hainan.

The focus of developing the CBDC will be mainly for domestic use, said Li. Besides Chinese citizens, foreign visitors to the Beijing Winter Olympics to be held next year will also be using it.

Li said they would cooperate with other countries to find a solution for cross-border payments in the long run. Earlier this month, the People's Bank of China ran a one-day pilot program to test digital yuan for cross-border payments. The selected Hong Kong residents used e-CNY as a payment method in the neighboring city of Shenzhen and South China's Guangdong Province.

At the same forum, Zhou Xiaochuan, China's former central bank governor, said the initial motivation for developing e-CNY was for domestic retail payments and not for cross-border payments.

According to Li, the goal with digital yuan is not to replace the US dollar or other global currencies but let the market make choices. The internationalization of the yuan will be a natural process, he said.

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