Digital Yuan Transactions Volume Tops $14B Mark
The e-CNY pilot program has already expanded to 23 cities and regions in 15 provinces and provincial-level cities.
The pilot phase of the digital yuan, China’s central bank digital currency (CBDC) project, has recorded close to $14 billion, or 100.04 billion yuan, in transactions. The latest numbers now make the digital yuan, the e-CNY, the most widely adopted CBDC in the world.
According to data from the central bank, over 360 million transactions were made with the digital yuan as of August 31 as the trials of the CBDC reached 15 provinces. The report also revealed that over 5.6 million merchant stores already support the digital yuan as a legal tender, according to the post, boosting its transaction value by 20% from the previous report in late May.
The report further stated that local authorities have launched several campaigns to increase usage and advertise the digital yuan. Authorities also permitted residents to use digital currency to pay utility bills, claim tax refunds, and get health insurance reimbursements.
“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 report stated.
China’s central bank has been trying to eventually replace currency with the digital yuan since the beginning of its CBDC trials in April 2020. In September 2022, It announced intentions to extend the deployment of the e-CNY to four of the nation’s provinces, including Guangdong.
The financial regulator also revealed its plans for the project’s advancement, including starting cross-border payments between Hong Kong and the People’s Republic of China, actively exploring the multilateral cross-border option in partnership with the Bank for International Settlement, and following the principle of “anonymity for small amounts and traceability for large amounts” to safeguard user data.
According to a white paper released by the central bank in July 2021, the People’s Bank of China has been developing the digital yuan since it established a task group to build virtual legal money in 2014.
The e-CNY pilot program began in the latter stages of 2019 in four locations, Shenzhen in Guangdong province, Suzhou in Jiangsu, the Xiong’an New Area in Hebei, and Chengdu in Sichuan. The program has since gradually expanded to 23 cities and regions in 15 provinces and provincial-level cities.
China’s seemingly early success in the deployment of the CBDC comes after the country placed a ban on cryptocurrencies including even the biggest ones on the market (Bitcoin, ETH, XRP, BNB, etc.).