People’s Bank of China Tests New Digital Currency

Partnering With Rideshare Company, Didi

Didi Chuxing, the Beijing-based rideshare company, has partnered with the People’s Bank of China to test a new digital currency. The currency does not yet have an official name, but it is currently referred to as “digital currency/electronic payment,” or “DC/EP.”

DC/EP will share some characteristics with bitcoin and Facebook (FB)’s Libra. Chinese officials have said eventually it will replace some cash in circulation, but will not replace money supply like bank deposits. The Chinese government hopes that DC/EP will be a useful way to curb money laundering in the country.

Other Tests

The People’s Bank of China has been working to create the digital currency since 2014. In April 2020, the bank conducted successful tests of DC/EP using it to pay a portion of government employees’ salaries in four Chinese cities.

After launching its digital currency with Didi, PBOC also plans to test it through partnerships with other businesses. In a new city being built outside of Beijing, DC/EP will be rolled out at several restaurants including Starbucks (SBUX) and McDonald’s (MCD).

An Economy Primed for Digital Payments

When the new currency is rolled out with Didi, it will become available to the company’s 500 million users. Didi is sometimes called “the Uber (UBER) of China.” While the company does control more than 90% of the ride-hailing market in China, it also offers freight transportation, bike rentals, deliveries, and other services.

Smartphone payments are widely used in China already, and their popularity has increased during the pandemic. Didi users can already pay for services by using Tencent’s (TCEHY) WeChat Pay and Alibaba’s (BABA) Alipay, meaning they will be primed to use the new digital currency.

Please understand that this information provided is general in nature and shouldn’t be construed as a recommendation or solicitation of any products offered by SoFi’s affiliates and subsidiaries. In addition, this information is by no means meant to provide investment or financial advice, nor is it intended to serve as the basis for any investment decision or recommendation to buy or sell any asset. Keep in mind that investing involves risk, and past performance of an asset never guarantees future results or returns. It’s important for investors to consider their specific financial needs, goals, and risk profile before making an investment decision.
The information and analysis provided through hyperlinks to third party websites, while believed to be accurate, cannot be guaranteed by SoFi. These links are provided for informational purposes and should not be viewed as an endorsement. No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this content.
Communication of SoFi Wealth LLC an SEC Registered Investment Advisor
SoFi isn’t recommending and is not affiliated with the brands or companies displayed. Brands displayed neither endorse or sponsor this article. Third party trademarks and service marks referenced are property of their respective owners.

All your finances.
All in one app.

SoFi QR code, Download now, scan this with your phone’s camera

All your finances.
All in one app.

App Store rating

SoFi iOS App, Download on the App Store SoFi Android App, Get it on Google Play

ABOUT SoFi SoFi helps people achieve financial independence to realize their ambitions. Our products for borrowing, saving, spending, investing, and protecting give our more than one million members fast access to tools to get their money right. SoFi membership comes with the key essentials for getting ahead, including career advisors and connection to a thriving community of like-minded, ambitious people. For more information, visit Want an easy and convenient way to manage your financial life? Get the SoFi app. For iOS and Android.

TLS 1.2 Encrypted
Equal Housing Lender