Fan Yi Fei, the deputy governor of the PBoC, reported that the People’s Bank of China has processed more than three million transactions, worth 1.1 billion yuan ($ 162 million) as part of the pilot for a digital currency of the central bank (CBDC).
China advances with its digital yuan
The deputy governor of the PBoC announced on Monday at the Sibos 2020 conference that 3.13 million transactions have been processed using the currency.
“A total of 113,300 personal digital wallets and 8,859 corporate digital wallets have been opened until the end of August”Fei pointed out.
Along the same lines, according to the South China Morning Post report, the digital yuan has been tested for much of the past year in cities like Shenzhen and Xiongan.
Likewise, the pilots are expected to take place at the next Winter Olympics in 2022.
So the pilots appear to have produced very positive results, with over 6,700 use cases implemented for a CBDC. This includes areas such as bill payments, catering services, transportation, purchasing, and government services.
“The PBOC sees the digital renminbi as an important financial infrastructure for the future,” Fan said in his speech during the conference.
In fact, the pilot made China’s CBDC the most widely used digital currency in a trading environment. Reports even suggest that around 5,000 Shenzhen medical workers received envelopes containing digital yuan.
Fan explained that the digital yuan is being used for multiple payment methods, including barcode, facial recognition, and tap-and-go transactions.
A long-standing project
Some people might think that China’s digital currency project is recent. However, the truth is that no. In fact, it begins in 2014, at which point a digital currency research institute is established.
Consequently, China has a long research road to harness crypto-inspired technology to modernize payments and, of course, exert geopolitical force.
In this sense, there is a lot of ambition regarding the project. Fei explained that “We could achieve interoperability and address the trilemma – low costs, low risks, high efficiency – by using digital fiat currency.”
He further explained that, to protect fiat currency from crypto and safeguard monetary sovereignty, “It is necessary for central banks to digitize banknotes through new technologies.”
When it comes to protecting monetary sovereignty, it does so with its sights set on Stablecoins; coins that have triggered a ‘new wave of competition trying to reap benefits by replacing fiat currency in circulation. ‘
However, China’s progress on this issue represents a threat to the rest of the countries; especially for the United States, as many experts believe that it puts the dominance of the US dollar at risk.
And we must bear in mind that China already has the largest market for mobile payments. What will be the impact of the latest developments on the digital yuan pilot?
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