The CBDC project of the central bank of China has touched on the point of up to 100.04B yuan (nearly $14B) in transaction volume during the pilot phase thereof. In this way, the e-CNY (digital yuan) turns into the most broadly adopted central bank digital currency across the globe. The Chinese government has been planning to speed up the CBDC project since September.
$14B Mark Achieved by Digital Yuan of China (CBDC) in Its Transfers
A report was shared by the Bank of China in a post published on 10th October on its formal WeChat page by the summer’s end. It disclosed there that the transfers carried out in fifteen provinces present in its CBDC pilot agenda had reached the point of up to 360M. Above 5.6M merchant stores in advance back digital yuan to operate in the form of a legal tender, as per the respective report. Additionally, the pilot project is spreading across the state organizations, coping with a huge span of payments by the citizens.
The report added that e-government service venues have started digital renminbi-related payment facilities, supporting offline and online channels to deal with utility payments, with the use of digital renminbi for the issuance of tax refunds, specific funds per-month payment of medical insurance, funds devoted to assisting the needy people, as well as the funds specified for unique enterprises. China Planning to Speed Up Deployment of Digital Yuan Smart Contracts after Increased Use Cases
The financial regulatory agency disclosed its strategy regarding the project development. This takes into account the launch of cross-border payments between mainland China and Hong Kong. As a result, it will be capable of delving into the manifold cross-border facilities by having the Bank for International Settlement as its partner. In this respect, it will follow the rule of anonymity in the case of small amounts while traceability of huge figures to shield the personal data of the consumers.
The initial CBDC trials of the country’s central bank were started in 2020’s April. The focus of the organization has since been on finally replacing the traditional currency with a digital one. In September this year, the institution revealed the strategy to broaden the development of its e-CNY project to four provinces within the country, in which Guangdong is also included. On the other hand, previously, the respective pilot project was just operated in distinct cities.
A significant thing is that, according to the report of the Bank of China, there were approximately $13B (almost 87.5B yuan) worth has been transacted up till January this year. the most recent updates about the matter have brought to the front that – during the previous 7 months – the cumulative amount of the latest transfers did not surpass the figure of $1 billion.
e-CNY Still Requires Struggling Hard to Compete Prominent Digital Payment Firms in China
During the start of 2022, the market of digital payments within China, in general, went through a decline because of the pandemic measures taken to control Covid-19 as well as a decreased economy overall, as stated by Wang Pengbo – serving at Botong Analysys (a market consultancy) as a financial analyst. Thus, the entirety of the e-CNY transfers indicates that the formal digital currency of the country is even now at a huge distance to taking the turnover thereof at an equal position to that of China’s prominent providers of digital payments.
