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Latest on China’s state cryptocurrency

Photo of: Joseph Stone
by Joseph Stone

This year, several pilot programs for the digital yuan were launched in China. Testers are reported to have spent an average of 351 CNY (USD 52) per transaction, bringing the total value of “pilot” transactions to 1.1 billion CNY (USD 162 million).

According to Fan Yifei, vice-governor of the People’s Bank of China (PBoC), 3.13 million transactions were processed with digital currency, reports the South China Morning Post, adding that 122,100 portfolios were created. Nearly 93% of them are personal portfolios, while others are owned by companies. According to these figures, there were an average of nearly 26 transactions per portfolio.

Pilot programs in China’s major cities have seen more than 6,700 use cases by the end of August for transactions ranging from bill payments and transportation to government services, according to the article, which quotes the vice-governor of the People’s Bank of China. The digital yuan is also used for multiple payment methods, including barcodes, facial recognition, and “tap-and-go” transactions.

“PBOC regards digital renminbi as an important financial infrastructure for the future,” Fan said in a recorded speech in Chinese for the conference.

JD.com, China’s multi-billion dollar e-commerce platform, also recently joined the digital yuan initiative. It becomes the largest company to date to admit that it is working with Beijing as it strives to become the first major economy to launch a digital version of its cash currency.

The Vice Governor also revealed that the digital yuan is being used to reward approximately 5,000 medical and healthcare workers involved in the treatment of COVID-19.

Fan, the former chairman of Shanghai Bank and deputy secretary of China Investment Corporation, previously warned the public of the potential to destabilise state economies that cryptocurrencies have.

The digital currency also would give the PBOC the ability to trace and track economic activity in real time.

“Data is king,” Fan said. More will be known soon around this important topic for cryptocurrency.