China's Bank of Ningbo readies digital yuan business as Beijing expands e-CNY

SHANGHAI/BEIJING, March 20 (Reuters) - China's Bank of Ningbo said it is inviting suppliers to help build a system ‌to handle the digital yuan, in a sign ‌that the country's central bank may soon hand out more licenses as it ​tries to broaden the use of its e-CNY.

The People's Bank of China (PBOC) may allow another 12 Chinese banks to conduct e-CNY businesses, local media outlet Caixin reported late on Thursday. Currently, ‌China has licensed 10 ⁠banks for digital yuan business, including top state banks such as Bank of China and China ⁠Construction Bank.

Beijing is stepping up its e-CNY initiative to cement its lead over other central banks in digital currency development, ​and to ​fend off threats from cryptocurrencies, ​which have facilitated capital flight ‌and evasion of currency controls.

In December, the PBOC reaffirmed a ban on virtual currencies, and set up an operation centre in Shanghai to promote global use of the digital yuan.

From January 1, the PBOC made e-CNY interest-bearing to increase its ‌appeal.

Bank of Ningbo said in a ​procurement statement dated March 17 that ​it is soliciting suppliers ​for its digital yuan system project. Preferred applicants ‌would be familiar with digital ​yuan wallets, it ​said.

The PBOC launched the digital yuan in 2019 but its use has so far been limited among the ​public, who heavily ‌rely on China's ubiquitous platforms Alipay and WeChat Pay ​for digital retail payments.

(Reporting by the Shanghai and Beijing ​newsroom; Editing by Kevin Buckland)