China to test sovereign digital currency on ride hailing giant Didi

FILE PHOTO: A Didi sign is seen on a car during the China Internet Conference in Beijing, China June 21, 2016. REUTERS/Stringer/File Photo

BEIJING (Reuters) - China’s central bank is partnering up with Didi Chuxing to test the use of its digital currency, which could make China’s dominant ride hailing platform one of the world’s first’s corporate users of a government-created virtual currency.

The digital currency research unit of People’s Bank of China (PBOC) is working with Didi to apply digital currency electronic payment, or DCEP, on the ride hailing app, Didi said in a statement on Wednesday.

Didi said the partnership occurred in an atmosphere where “the government seeks to support the development of the real economy sectors with innovative financial services.”

China’s central bank set up a research team six years ago to explore the possibility of launching its own digital currency to cut the costs of circulating traditional paper money and boost policymakers’ control of money supply.

Government officials said last year that the digital currency was “almost ready” but have said little about a launch timetable in recent months though it has been carrying out tests.

Didi said it currently serves a total of over 550 million users. Before the second wave of local coronavirus cases hit Beijing, Didi’s chief executive Cheng Wei said in early June that the platform’s ride-hailing orders in China had returned to pre-pandemic levels.

Didi’s peak daily ride-sharing orders has surpassed 30 million, Cheng said, adding that the company’s bike-sharing business, Didi Bike, saw daily orders reach 10 million.

Reporting by Yingzhi Yang in Beijing and Brenda Goh in Shanghai; Editing by Simon Cameron-Moore