China’s Commerce Ministry has announced imminent plans to expand a pilot programme for its homegrown digital currency to include several large cities across the country.

In April, China’s central bank introduced a digital currency across four major cities ((Shenzhen, Suzhou, Chengdu and Xiong’an, a satellite city of Beijing) as part of a pilot programme.

Now, the pilot programme will be broadened to cover much of China’s most prosperous regions:

The capital Beijing and nearby Tianjin and Hebei province in the north; the Yangtze River Delta to the south; and, along China’s wealthy southern coast, Guangdong province and the neighbouring cities of Hong Kong and Macau.

Cities in the country’s poorer central and western regions that meet certain requirements will also roll out trials of the digital currency.

Internal tests will be conducted in all the cities to improve the currency’s functionality, the digital currency research institute, under the People’s Bank of China, said.

The research institute said in April that the pilot was being launched, in part, to prepare for the 2022 Winter Olympics in Beijing.

The policy design should be completed by the end of 2020, the Ministry said but gave no timeline for when the expanded pilot programs would begin.

The digital currency has no official name yet

The new currency, which doesn’t have an official name but is known by its internal shorthand “DC/EP,” or “digital currency/electronic payment,” will share some features with cryptocurrencies including bitcoin and Facebook’s Libra, central bank officials have said.

While China’s digital currency wouldn’t be able to claim the anonymity that bitcoin and other cryptocurrencies tout, Chinese central bankers have vowed to protect users’ privacy.

The intention, the central bankers have said, is to replace some of China’s monetary base, or cash in circulation.

It won’t replace other parts of the country’s money supply, such as bank deposits and balances held by privately-run payment platforms, Yi Gang, the governor of China’s central bank, said last year.

Government workers have begun using the digital currency

In Xiangcheng, a district in the eastern city of Suzhou, the government has already started paying civil servants half of their transport subsidy in the digital currency as part of the city’s test run.

Government workers were told in April to begin installing an app on their smartphones into which the digital currency would be transferred.

Civil servants were also told that the new currency could be transferred into their existing bank accounts or used directly for transactions at some designated merchants.

A tool against money laundering, gambling and terror financing

China is ahead of many other countries in preparing the launch of an official digital currency.

In recent years, the use of traditional paper bills and cash has declined sharply, and smartphone payments have become so ubiquitous that many Chinese people, particularly younger urban dwellers, no longer carry their wallets or cash for shopping.

Instead, they use Tencent Holdings’ WeChat Pay and Alipay, operated by Ant Financial Services Group, an affiliate of Alibaba Group Holding.

China’s central bank has said that shifting to a government-run digital payment system will help combat money laundering, gambling and terror financing. It has also hailed digital currencies as a way to improve the efficiency of transactions in its financial system.