eCNY Added To China’s Monetary Count
The People’s Bank of China (PBOC) has included its central bank digital currency (CBDC) in official cash reports for the first time.
By the end of December, China’s digital yuan, also known as e-CNY, had reached roughly $2 billion.
This is said to be equivalent to 0.13% of China’s outstanding monetary base supply.
Announced in 2019 and launched for public testing in April 2021, China’s CBDC has made its way into 26 different cities and into the hands of 5.6 million merchants.
Unlike bitcoin and ether, the digital yuan is not based on a blockchain or distributed ledger and should not be confused with decentralised cryptocurrency or stablecoins like tether and USDC.
It is government-issued money with centralised technical underpinnings similar to traditional, fiat-powered payment apps like Apple Pay.
Late last year, the Bank of China in Hong Kong invited 500 customers to open trial accounts and receive 100 e-CNY to spend in various stores across the mainland and at local supermarket chains.
The scheme sparked a lot of interest, and accounts were gone in two days. Another prank involved $6.2 million in “red packet” lottery giveaways.
The PBOC claimed in October that it had processed more than $13.9 billion in CBDC transactions, but those figures have not been independently verified.
China’s push for CBDC adoption has been tied to plans for more dominant currency when transacting with foreign countries, and hypothetically boosting the yuan’s position as a potential reserve asset.
(With inputs from Shikha Singh)
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