PBoC Governor says digital yuan transactions reached $250B.

PBoC Governor says digital yuan transactions reached $250B.

The Growing Success of China’s Central Bank Digital Currency (CBDC)

In recent news, Governor Yi Gang of the People’s Bank of China (PBOC) revealed some impressive statistics regarding the transaction volume and adoption rate of China’s central bank digital currency (CBDC), also known as the Digital Yuan. The figures are astounding, with a transaction volume of $250 billion within just one-and-a-half years of the pilot tests. This highlights the rapid growth and success of the Digital Yuan in China’s financial landscape.

The Rise of the Digital Yuan

Governor Yi Gang made these remarks during a conference in Singapore, emphasizing that the Digital Yuan has transacted a total of 1.8 trillion yuan as of the end of June. These impressive numbers indicate the increasing popularity and acceptance of the CBDC among Chinese citizens. Since its introduction in January 2022, approximately 950 million transactions have been made from around 120 million wallets, resulting in an average transaction amount of about $260.

This surge in usage and adoption can be attributed to the efforts made by the Chinese government and the central bank to promote the Digital Yuan. With the support of various initiatives and trials, the PBOC aims to establish the Digital Yuan as a widely accepted form of payment within the country’s economy.

Slow Adoption and Cross-Border Trials

Despite the remarkable success within China, the adoption of the Digital Yuan has been relatively slower considering the country’s vast population of 1.4 billion. The primary usage of the Digital Yuan has been for domestic retail payments, with only a few trials conducted in Hong Kong. However, the Bank of China Hong Kong (BOCHK) recently initiated a trial for a cross-border payment scheme, allowing mainland customers to use the Digital Yuan for shopping at over 200 retail stores in Hong Kong.

This move signifies the expansion of the Digital Yuan’s usage beyond domestic boundaries, providing a glimpse into its potential as a cross-border payment solution. The “cross-border shopping festival” organized by BOCHK enables customers to make payments with the Digital Yuan at various retailers, enhancing the cross-border usage of the CBDC.

Advancements in Offline Payments

In addition to cross-border trials, the Bank of China launched trials for offline payments using the Digital Yuan. The initial phase of these trials is limited to specific regions, including Beijing, Shanghai, Shenzhen, Chengdu, and Suzhou, and certain Android phones. The groundbreaking aspect of these trials is that users can make digital yuan payments even without a bank account or internet connection.

To enable this functionality, the trial utilizes “super SIM cards” with near-field communication capabilities in conjunction with the Digital Yuan app. This innovation allows individuals without access to traditional banking services or internet connectivity to participate in the digital economy, opening up new avenues for financial inclusion.

Summary of Digital Yuan’s Progress

To summarize the remarkable progress of the Digital Yuan:

  • The transaction volume has reached $250 billion within one-and-a-half years.
  • Approximately 950 million transactions have been made from 120 million wallets.
  • The average transaction amount is around $260.
  • The Digital Yuan has been primarily used for domestic retail payments, with limited cross-border trials.
  • The Bank of China Hong Kong has initiated a cross-border payment scheme, allowing mainland customers to use the Digital Yuan for shopping in Hong Kong.
  • Trials for offline payments have been launched, enabling individuals without bank accounts or internet connections to participate in the digital economy.

These milestones highlight the tremendous potential of blockchain technology and its application in the financial sector. The success of the Digital Yuan showcases how a well-implemented CBDC can revolutionize the way people transact, providing convenience, security, and financial inclusion.

It is evident that China’s relentless efforts in promoting and advancing the Digital Yuan have paid off, as demonstrated by the substantial transaction volume and growing acceptance within the country. As other nations closely observe China’s progress, we can expect to see further developments and adoption of CBDCs worldwide, leading to a more digitized and efficient global financial system.

For more information, you can visit MAS Lecture 2023 for insights from Dr. Yi Gang, President of China Society for Finance and Banking, on “CBDC from China’s perspective.”

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