The People's Bank of China, the central bank, is testing its digital currency in four areas and some of the sites for the 2022 Winter Olympics, but has not set any specific timetable for its formal debut, a source familiar with the matter told China Daily on Monday.

"The pilot program has not yet been expanded on a large scale," and the test is just "internal and closed", said the source, who did not want to be named.

At present the tests are being held in Shenzhen, Chengdu, Suzhou, Xiong'an and some areas where the 2022 Winter Olympics will be held, said the source. "As far as I know, the pilot plan remains unchanged so far."

Before expanding the pilot program on a large scale, there are still some key problems that need to be solved by the monetary authorities, including the technical and market promotion matters, to make more people accustomed to the use of the digital currency, analysts said.

Currently, the tests include salary payments to civil servants, payment for public transport services and energy and supply chain trading. "Most of the applications are designed for consumer consumption, and it still needs time to find the appropriate model for business users," said Yang Dong, head of the Financial Technology and Blockchain Research Center of the Law and Technology Institute at the Renmin University of China.

E-payment services in China are dominated by internet giants such as Alipay and WeChat Pay which allow transfer of money by a simple scan of the quick response code. The sovereign digital currency may need to find ways to make the payment options more convenient and the costs will have to be competitive with other third-party payment services. "Otherwise, it will be a challenge for the central bank to earn users for its digital currency services," said Yang.

The digital currency could choose payment methods involving the "near field communication" technology, or NFC, which means the transaction can be finished offline, as long as the two devices are close to each other. But that will cost more if it needs to use new terminals or equipment. "The central bank should consider cooperation with the third-party payment platforms (to save costs)," he said.

Some experts told China Daily that before the official launch of the central bank digital currency, or the "DC/EP" (digital currency and electronic payment), adjustments of the initial plans are possible, as the situation is "much complicated", and whether it can debut in the second half of the year is still not clear.

On Aug 3, the PBOC held a meeting to ramp up plans for the second half of this year, wherein it said it would "actively and steadily" promote the research and development of the DC/EP.

The Commerce Ministry issued a document on Friday, which outlined plans to start trials of the digital yuan in some regions－the Beijing-Tianjin-Hebei region of northern China, the city cluster in the Yangtze River Delta region including Shanghai, the Greater Bay Area including Shenzhen, Hong Kong and Macao, and some developed areas in mid-western China.

The PBOC is in charge of making the policy measures, and the pilot program could be extended to other areas, but that depends, the Commerce Ministry said in the document.

"Although the technical design of DC/EP has changed several times so far, the final target is to partly replace the cash in circulation, or M0," Zhu Taihui, a researcher of the National Institution for Finance and Development, said in a recent research paper.

The introduction of the DC/EP will promote the internationalization of the yuan, as foreigners can have their digital wallets and participate in the DC/EP transactions through a simple registration process, by just providing their email addresses. It can also simplify cross-border payments, said Zhu.