At the virtual SIBOS banking meeting, People’s Bank of China (PBC) Deputy Governor Fan Yi Fei shared figures about the digital yuan trials. There have been over 3,000,000 exchanges adding up to RMB 1.1 billion ($160 million) through to late August utilizing the central bank digital currency(CBDC).
The tests incorporated the production of 113,300 individual digital wallets and almost 9,000 corporate wallets.
Testing the Digital Yuan
Already, blended reports have been there about doing the trials. The deputy governor explained that PBC regards digital RMB as a critical financial infrastructure for the future. It has actively carried out research and development and pilot projects under the guarantee of two-tier operation, M0 substitution, and controllable anonymity. The architecture, standard formulation, research & development of functionality, joint debugging, and testing of e-CNY systems have gotten completed.
Confirming an earlier announcement, he stated that ‘internal closed pilots’ were in Shenzhen, Suzhou, Xiong’an, and Chengdu. The trials will also take place during the forthcoming Winter Olympics, he added.
Fan confirmed 6,700 tested use cases, including bill installment, providing food administrations, transportation, shopping and utilization, government services, and others. He likewise referenced that 5,000 clinical and medical care laborers in the Luohu District of Shenzhen got a red envelope or presented their commitments towards battling COVID-19. The cash could get utilized by local traders.
Topping Digital Currency Adoption
As a digital currency/electronic payment(DC/EP), the digital yuan has been an aspect of the Chinese government’s long-standing initiative since 2014. China established a digital currency research institute that would use cryptocurrency-inspired technology to modernize payments, bypass international trade networks, and exert geopolitical strength.
Fan stressed in his SIBOS talk about the value of the digital yuan. He said that to shield fiat cash from crypto-resources and protect money related sway, national banks must digitize banknotes through new technologies.
The trials have extended to Beijing, the Yangtze River Delta locale, Tianjin, Hebei, Guangdong, and the urban communities of Hong Kong and Macau. In August, the nation’s Commerce Ministry said that they could turn to central and western China later.
Cross Border Payments
In another part of the SIBOS talk, Fan discussed how CBDCs might address cross border payments. He stated that they could achieve interoperability in cross-border payments; simultaneously, they hope to manage the trilemma (low costs, low risks, and high efficiencies) using digital fiat currency.
Through collaborating with private sectors and adapting to long-term technology evolution, cross border payments are possible. It will establish a fiat digital currency alliance that observes regulations across jurisdictions and complies with international standards; for instance, PFMI (Principles for Financial Market Infrastructure).