While the adoption and use cases of China’s central bank digital currency are expanding, the digital yuan still only represents 0.16% of China’s monetary supply.
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Nearly $250 billion worth of transactions have taken place using China’s digital yuan in the one-and-a-half years since the start of its pilot, the country’s central bank governor has claimed.
On July 19, People’s Bank of China governor Yi Gang told a conference in Singapore that its central bank digital currency transacted 1.8 trillion yuan as of the end of June.
Yi added there have been around 950 million transactions from roughly 120 million wallets since the digital yuan’s initial January 2022 rollout, leading to an average transaction amount of about $260.
MAS is honoured to have Dr Yi Gang, President of China Society for Finance and Banking as the speaker for the MAS Lecture 2023. Dr Yi spoke on “CBDC from China’s perspective”.
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He claimed around $2.3 billion, or 16.5 billion digital yuan, was in circulation at the end of June, which only represents 0.16% of China’s monetary supply, according to a July 19 Reuters report.
The digital yuan’s adoption is still minimal relative to China’s 1.4 billion strong population, so far mostly being used for domestic retail payments aside from a few trials in Hong Kong.
On July 18, the South China Morning Post reported that the Bank of China Hong Kong began trialing another cross-border payment scheme for Bank of China customers at select retail stores in Hong Kong.
The trial was rolled out in a bid to further promote the cross-border applications of digital yuan and is the third cross-border trial of the CBDC in Hong Kong, according to the SCMP.
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In a trial last year the BOCHK launched a program that encouraged customers to set up a BOC e-CNY wallet to receive $14 (100 yuan) to be used at the Hong Kong supermarket chain U Select.
In January, the central bank integrated smart contract functionality into the digital yuan to expand upon its use cases.
The $250 billion in digital yuan transactions is an over 70% increase from the number the bank cited in August 2022.
The amount is still, however, far off the amount of value processed by some of the largest public blockchains in the world.
Bitcoin (BTC), for example, processed $8.2 trillion in 2022, according to various reports.
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