Spending with China’s state-issued digital currency has surpassed 100 billion yuan, close to $14 billion, by the end of August, the country’s monetary authority revealed. Beijing is expanding the pilot areas to more Chinese regions, and the digital yuan has been accepted by over 5 million merchants.
People’s Bank of China Reports 360 Million Digital Currency Payments
Transactions with China’s central bank digital currency (CBDC) exceeded 100 billion yuan in value ($13.9 billion) as of Aug. 31, 2022, rising from almost 88 billion yuan by the end of 2021, the People’s Bank of China (PBOC) announced on Wednesday. According to Reuters, the monetary regulator said that there were 360 million transactions.
The data has been released as financial authorities in the world’s most populous nation proceed with the digital yuan (e-CNY) roll-out and constantly increase the coverage of its trials. The CBDC is now available in 15 cities and towns, where 5.6 millions merchants accept the digital Chinese Yuan.
Nearly 30 rounds of eCNY subsidies have been distributed this year to pilot areas. Many were dispersed through red envelope campaigns like the one that was held in Shanghai last spring, where $4.5million in digital yuan went out. The PBOC stated that these initiatives are intended to increase consumption and combat the effects of Covid-19, as well as promote low-carbon transportation.
The digital yuan is currently used mainly for domestic and small-scale retail payments. However, Beijing plans to expand its use to include the financial and corporate sectors as well as taxation and government affairs. It wants its platform to be connected to other digital payment systems, such as Alipay/Wechat Pay. The central bank has also urged the expansion of the use-case scenarios.
The e-CNY will also allow for cross-border payments. The People’s Bank of China recently participated in the testing of international settlements with several CBDCs, along with the monetary authorities of Hong Kong, Thailand, and the United Arab Emirates, a project coordinated by the Bank for International Settlements (BIS).
There have been steps taken to link the Hong Kong digital payment system with the infrastructure of digital yuan. China’s special administrative region is preparing to trial its own CBDC. The pilot phase, called eHKD, of the digital Hong Kong Dollar, or e-HKD will begin before the end of this year, and comes after consultations with the public.
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