China Doubles Down on CBDC, Expands Tests for Digital Yuan

Crypto Regulation
China Doubles Down on CBDC, Expands Tests for Digital Yuan

In recent times, China has looked towards expanding its digital yuan usage trials by paying the wages of government employees using the currency. There are reports of the e-CNY also gaining adoption in hospitals and other municipal services. 

China Expands Digital Yuan Experiment

Recent reports indicate that China is amping up the tests of its digital yuan e-CNY. Last Saturday, Tianjin Municipal Finance Bureau told all government employees to start creating wallets for e-CNY. The body has already began paying some government employees using the currency. 

A press release from the Bureau says that “On April 26, the Municipal Finance Bureau distributed wage subsidies in the form of the digital renminbi to the digital renminbi personal wallets of employees…and the pilot work was a complete success.”

Moreover, there are multiple cases of continuous adoption of the e-CNY in different Chinese hospitals, especially in the Guangzhou and Hangzhou regions. For instance, a media report from Zhejiang daily noted that the Zhejiang Provincial Hospital accepts the e-CNY for payments.  

Another hospital, the Guangdong People’s Provincial Hospital of Traditional Chinese Medicine, is one of the early adopters of the e-CNY. They introduced the service on April 29, with a recent report indicating that the payment transaction only takes 30 seconds. 

The pilot program aims to test the digital app in different cities across China like Hangzhou, Wenzhou, Ningbo, Huzhou, Shaoxing, and Jinhua. Other earlier reports indicate that the transactions passing through the app were deemed smooth after some tests.

Hospitals are not the only ones accepting the digital Yuan. According to reports, the Yuan is used in 23 cities for municipal services and public transport like metro, buses, trains, taxation, highway toll gates, and social insurance. 

Mission to Popularize the e-CNY and APP

China was the first country to introduce a digital version of its native currency, and by December 2021, total transactions using the e-CNY hit abot 87 billion Yuan, or $11.238 billion. But, there is still more need to popularize and increase the adoption of the Yuan. 

According to the finance bureau release, they believe that the e-CNY is a vital aspect of the country’s future economy. Hence, these initiatives concerning salary are focused on publicizing the digital Yuan and popularizing its characteristics. 

They also want to enforce an agreement with the banks issuing salaries to employees to use the e-CNY. But, they need to ensure that before salary issuance, they double-check personal information and wallet codes to ensure they are accurate. 

Other Countries on The CBDC Race

In a survey done by BIS, out of 81 central banks polled, ten were already exploring the concept of CBDC and how to issue it. Other reports indicate that countries like Nigeria, Ukraine, Uruguay, Thailand, Sweden, Bahamas, Eastern Caribbean, and South Korea are among the top countries in this race.

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