China has been among the major champions for a central bank digital currency (CBDC). The country is currently running a trial phase for its CBDC, and the extent of this trial phase seems to be growing at a staggering rate.
According to the details shared on October 2021 during the Hong Kong Fintech Week, the number of individual digital yuan accounts has increased to 140 million, while the number of corporate accounts has reached 10 million. These details were shared by an executive of the People’s Bank of China.
Digital yuan sees major growth
The official date for the launch of the digital yuan has not been announced. However, the country continues to expand the reach of its trial phase into other regions. A report from Reuters showed that individuals had spent around $9.7 billion, equivalent to 62 billion yuan as of October 2021.
Last year, the PBoC governor, Yi Gang, stated that the digital yuan pilot phase recorded $299 million in transactions equivalent to 2 billion yuan. This shows that the digital currency’s transaction volumes have increased by 3000% over the past year.
Some of the parties that have been involved in this initiative to launch the digital yuan include utility merchants, catering companies, transportations sectors, retail sectors and government services.
Replacing fiat currency
The digital yuan is a digital currency that is intended to replace the Chinese fiat currency. The currency is fast gaining adoption from individuals and businesses. According to the head of the PBoC’s Digital Currency Institute, Mu Changchun, the number of accounts affiliated with the digital yuan had grown tremendously.
The PBoC executive also stated that there were different types of e-CNY wallets. The base wallet came with an annual transaction cap of 50,000 digital yuan, equivalent to $7800. To create this type of wallet, an individual just needed to register using their phone number.
However, users who wanted to create a wallet with no transaction cap needed to go to their bank branches with their personal identification details. This move will help curb the instances of money laundering.
Through the digital yuan, China seeks to replace fiat currency. The trial phase continues to be rolled out in major cities, contributing to the increased transaction volumes.
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