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China CBDC: PBOC to continue Digital Yuan development despite CBDC scam

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The latest development in China’s Central Bank Digital Currency, post the controversial CBDC scam, saw the People’s Bank of China reinstate its determination towards expanding and advancing the development of Digital Yuan. According to Reuter’s exclusive coverage of the Bank of Finland event, where the PBOC governor, Yi Gang spoke remotely about the Chinese authorities plan to improve the design and usage of Digital Yuan.

“Going forward, we will continue to prudently advance R&D of eCNY, improve its design and use.”, said Yi.

After the CBDC scam, Chinese authorities have guaranteed to improve the privacy protection and anti-counterfeiting features of Digital Yuan along with increasing its interoperability with existing payments tools. Furthermore, according to Yi Gang’s speech, China also plans to begin testing its CBDC’s impact on the nation’s monetary policy and financial markets.

Additionally, the governor noted that Digital Yuan will now also be focused on domestic retail payments in China. With China’s central bank’s digital currency crossing $10 billion in capitalization, along with over 140 million downloads of the government’s digital currency wallet, the authorities deem it ideal to work on improving design and usage instead of imposing an absolute ban like it did on cryptocurrency in the nation. The exceptional amount of approximately $9.7 billion transactions have been successfully processed via Digital Yuan. However, authorities have not announced an official launch date for the same, while the country continues Digital Yuan’s testing phase post its debut at the China International Import Expo (CIIE).

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China’s Digital Yuan Scam

Earlier this month, the authoritarian Chinese government fell face first when its promises of a secure and regulated digital currency failed with the first-ever CBDC scam in China. The Xinmi Public Security in collaboration with the Anti-fraud Center of the Zhengzhou Public Security Bureau arrested 11 suspects in the Fujian Province for illegally using digital Yuan to launder money. The authorities disclosed that China’s CBDC was being used as a medium to further launder money for an overseas fraud group hiding in Cambodia in the scam.

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Digital Yuan

China all set to establish digital asset exchange digital yuan

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The latest news about China’s decisions over central bank digital currency shows that plans are very serious about using government-backed digital assets.

The news comes some months after the Chinese government banned many operations regarding cryptocurrencies. But it seems the government is very serious in replacing the digital currency operations with a CBDC.

Although the operation of cryptocurrency exchanges is banned in China, new digital currency exchange is planned to be launched in the country. It will be launched in Beijing to promote the usage of digital yuan and to trade it. The new government-backed exchange will focus on digital Yuan, and it seems to be a competitor to cryptocurrency exchanges. According to Bloomberg:

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“Beijing will explore the possibility of establishing a bourse for digital assets trading, as part of broader efforts to boost financial services in the capital, according to guidelines issued by the State Council.”

China was the first country to announce plans for a central bank digital currency. Although the government has many problems with digital assets, and especially cryptocurrencies, it developed plans to promote the usage of digital currencies if they’re backed and controlled by the government.

China all set to establish digital asset exchange digital yuan

CBDCs are a form of digital currencies that are very different than cryptocurrencies. They focus on providing financial services to more people with the usage of fully digital infrastructures, somehow eliminating the cash. But these currencies are backed and controlled by governments and state banks. In simple terms, a CBDC is fiat money that leverages some of the technologies of blockchain but isn’t necessarily decentralized.

The Chinese cabinet has serious plans to force the usage of digital Yuan. Big banks are urged in the country to set up e-CNY operation firms. There are no details available about the plans for the announced digital exchange. But it seems the exchange is going to be something only focused on digital Yuan. Crypto enthusiasts can’t be optimistic about this plan, and there is no sign that cryptocurrencies will be allowed in this exchange.

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There are many headlines about China’s plans to promote the usage of the digital Yuan. The plans started as pilots in small cities and retailers. Merchants and retail receptions were the first to start the pilot program. It seems a broader plan is ready to be run in Winter Olympics in February. There were rumors about the Chinese government urging even foreign countries to accept e-CNY. But we should wait and see what all these plans result in and if e-CNY can be the first successful CBDC.

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Breaking: China May Set Up CBDC Exchange to Push Digital Yuan Use

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The latest update in China’s financial ecosystem saw the authorities make yet another attempt to push its Digital Yuan’s use, this time around by setting up a digital asset exchange in Beijing.

According to Bloomberg, the guidelines issued by the State Council point towards Beijing’s plans to look into establishing a bourse aka exchange for digital assets trading in lieu of boosting financial services in the capital. While the cabinet aims to speed up the nation’s Digital Yuan trials along with appealing banking giants to set up e-CNY operation firms, but there’s still no clarity about the details of the planned digital asset exchange as of now.

China Puts Blind Faith in its CBDC

Amid China’s fight against unregulated cryptocurrencies in the nation, as well as the authorities’ attempt to provide an alternative to decentralized digital currencies with its centralized digital yuan, there appears to be a lot going on in the country. One of China’s main reasons to implement a nationwide crypto ban was “consumer protection” given crypto’s unregulated nature. However, earlier this month, the nation’s authorities were presented with its first-ever CBDC scam. The Xinmi Police arrested 11 suspects in the Fujian Province for illegally using digital Yuan to launder money. The authorities disclosed that China’s CBDC was being used as a medium to further launder money for an overseas fraud group hiding in Cambodia in the scam.

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Nevertheless, Chinese authorities assured the public that they’d ascertain this remains an isolated incident by improving the privacy protection and anti-counterfeiting features of Digital Yuan. Furthermore, the authorities guaranteed to increase Digital Yuan’s interoperability with existing payments tools.

Along with strengthening the security system, the Chinese authorities have decided against halting its CBDC trials. The PBOC governor, Yi Gang spoke remotely at the Bank of Finland event, regarding the authorities’ plan to improve the design and usage of Digital Yuan and reinstated the country’s determination toward its expansion and advancement.

“Going forward, we will continue to prudently advance R&D of eCNY, improve its design and use.”, said Yi.

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China Hit a Milestone of 140 Million Digital Yuan Wallets, Said PBoC Official

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The number of digital yuan accounts in China has increased almost seven times since the end of June, reaching 140 million, said a PBoC official.

The number of digital yuan wallets in China has reportedly surged to 140 million, as 10 million of them are corporate accounts. Transactions in e-CNY reached 62 billion yuan, or $9.7 billion.

Seven Times More Than in June

When speaking of creating a digital version of a national currency, China’s efforts are among the most advanced globally. In recent months, the most-populated nation has launched numerous campaigns aiming to popularize the e-yuan among the locals.

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Following all these developments, a top official at the People’s Bank of China informed that the number of individuals who have opened digital yuan wallets reached 140 million, which equals around 10% of the local population. In comparison, these accounts were nearly seven times less in June and stood at 24 million.

Digital yuan transactions have also increased significantly from $5.4 billion four months ago to $9.7 billion as of now.

Nevertheless, it’s still pointing out that one person can open more than one account since the only requirement is to provide a phone number.

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Since the e-CNY payment transaction method is relatively new, it can be employed in criminal activities. On that note, another report reads that the Xinmi Police arrested 11 gang members after it cracked down the country’s first use of digital yuan in money laundering operations. The criminals have reportedly acted on behalf of an overseas fraud group hiding in Cambodia.

The USA-China Controversy over The Digital Yuan

The approaching Winter Olympic Games in Beijing next year, and more specifically China’s intention to allow athletes and foreign visitors to use its CBDC, heated up the tension between the two economic Superpowers.

The Republican Senators Cynthia Lummis, Marsha Blackburn, and Roger Wicker urged the US Olympic Committee to forbid American sportspeople from using the digital yuan during the event over spying concerns.

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China’s Foreign Ministry quickly stroke back to the verbal attack by telling the Americans to “abide by the spirit” and stop making trouble out of the digital yuan. The Chinese officials went further, stating that the US is not aware of what exactly digital currency is:

“We suggest they figure out what a digital currency really is. The US politicians should abide by the spirit stipulated in the Olympic Charter, stop making sports a political matter, and stop making troubles out of the digital currency in China.”

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