A CBDC pilot that is the largest in the world is expanding to include citizen payments and cross-border operations as well. China’s central bank digital currency project (CBDC), has crossed the milestone of 100.04 Billion Yuan (close to 14 billion USD) in made transactions during its pilot phase. Globally, digital yuan (the e-CNY) is the most widely used CBDC.
According to a post by the Bank of China on October 10, the total number of transactions in 15 CBDC pilot provinces had reached 360 million. This is according to the Bank of China’s official WeChat page. According to the post, more than 5.6 million merchants support the digital Yuan as a legal tender.
Some state institutions are also expanding the pilot to cover a broad range of citizen payments.
Multiple e-government platforms have opened digital payment services. These support online and offline channels to manage various public utility payments. Tax rebate funds and special funds for insurance payments can be issued in digital renminbi. Funds for people in need as well as ‘creative and innovative’ enterprise support funds.
The financial regulator shared plans for project development. These include the launch of cross-border payments between Hong Kong and mainland China, and actively exploring the multilateral cross border option in collaboration with Bank for International Settlement. To protect users’ personal data, the principle of anonymity for small amounts and traceability for large amounts was followed.
China’s central banking has been trying to replace cash with digital currency since April 2020 when it launched its first CBDC trials. It jointly announced plans in September 2022 to expand the deployment of the eCNY to four provinces of China, including Guangdong. (In the past, pilots were only conducted in cities).
It is interesting to note that the Bank of China reported approximately $13 billion (87.5 million yuan), in transactions as of January 2022. This could indicate that the total amount of new transactions for the past seven months has not exceeded $1 billion, according to the latest update.