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Digital yuan experiments are well underway with $300 million processed

Photo of: Joseph Stone
by Joseph Stone

The digital currency experiments of the Chinese central bank are progressing rapidly. The PBoC governor reports that more than 4 million digital Yuan transactions have been processed, representing nearly $300 million. Compared to the rest of the world, the superpower seems to have a head start.

The governor of the Chinese central bank is keen to make this known as well. Yi Gang provides some figures on current experiments around the digital yuan. As Bloomberg reports, the PBoC has so far processed 4 million digital currency transactions in the country.

In total, these transactions are worth more than $299 million. These indicators are very recent. The governor of the central bank provided these data on November 2 at the Hong Kong Fintech Week conference.

And Yi Gang is optimistic at this point. According to the senior Chinese official, the pilots are proceeding smoothly. Full-scale tests are underway in four Chinese cities, for example through a lottery for the general public.

According to the PBoC Governor, the current crisis is both a challenge and an opportunity for digital payments. The pandemic is driving the demand for these payment methods and contactless.

The main challenge, he adds, lies in reconciling ease of use and security. Moreover, digital currency could represent a serious asset for fintechs, the technological players in the financial sector.

Indeed, the governor believes that they enjoy key advantages over traditional commercial banks. In particular, these advantages lie in the ability of fintechs to build a customer base and manage risk.

The first pilot projects of the future digital yuan date back to April 2020. This phase would involve four metropolises, namely Shenzhen, Chengdu, Suzhou and Xiongan. The program has since been expanded to nine cities, including Guangzhou, Hong Kong and Macao.

In early October, the PBdC officially announced that digital yuan wallets had processed $162 million worth of transactions between April and August 2020. This figure has since nearly doubled.