Chinese Central Bank Says Digital Yuan Transactions Crossed 100 billion Yuan
China has been one of the first countries to kickstart its central bank digital currency (CBDC) journey and they are well ahead on this road. The Chinese central bank - People’s Bank of China (PBoC) - recently stated that they have achieved a major milestone of more than 100.04 billion yuan worth of transactions done in Digital Yuan or e-CNY.
As per the report shared by the Bank of China, by the end of summer, the total number of e-CNY transactions across 15 provinces had reached 360 million. As per the report, more than 5.6 million merchant stores in China are already supporting digital Yuan as a ledger.
Now, the Chinese government is looking to expand its CBDC pilot framework to some state institutions as well while covering a wide range of citizen payments.
The report notes: “Multiple e-government service platforms have opened digital renminbi payment services, supporting online and offline channels to handle various public utility payments, using digital renminbi to issue tax rebate funds, special funds for monthly medical insurance payment, funds for helping people in need, and ‘specialized, special and new’ enterprise support funds, etc.”
The Chinese financial regulator also shared plans for project development. This includes conducting cross-border e-CNY transactions across Hong Kong and China. Additionally, the PBoC in collaboration with the Bank for International Settlement will explore multilateral cross-border option while following the principle of “anonymity for small amounts and traceability of large amounts” in order to protect user’s personal data.
China launched its central bank Digital currency aka Digital Yuan back in April 2020. The larger goal for this economic giant is to replace cash with digital currency. Over the last two years, China has been conducting pilot tests with the use of e-CNY.
While the Chinese government celebrates on attaining this new milestone, the rate of e-CNY adoption is slowing down reports South China Morning Post (SCMP). Wang Pengbo, a senior financial analyst at market consultancy Botong Analysys, said: “The country’s digital payment market, as a whole, declined in the first half of this year because of Covid-19 control measures and the slowing economy”.
The financial analysts also adds that the e-CNY adoption might have reached a bottleneck in terms of attracting more users. Thus, the PBoC will now have to focus on improving the user experience along with the usage frequency.