China’s central bank governor, Yi Gang, revealed that transactions totaling nearly $250 billion have been conducted using the country’s digital yuan during the one-and-a-half years since its pilot launch. Speaking at a conference in Singapore, Yi Gang disclosed that the People’s Bank of China recorded 1.8 trillion yuan in transactions as of the end of June this year.
Since its initial rollout in January 2022, the digital yuan has witnessed approximately 950 million transactions from around 120 million wallets, resulting in an average transaction amount of roughly $260. However, despite these impressive figures, Yi Gang emphasized that the digital yuan’s adoption remains relatively limited compared to China’s massive population of 1.4 billion.
At the end of June, the circulating supply of the digital yuan was estimated at around $2.3 billion, equivalent to approximately 16.5 billion digital yuan. Surprisingly, this constitutes only 0.16% of China’s overall monetary supply, as reported by Reuters on July 19.
Primarily used for domestic retail payments, the digital yuan has seen only a few trials in Hong Kong. Nevertheless, authorities are keen on expanding its cross-border applications. On July 18, the South China Morning Post (SCMP) reported that the Bank of China Hong Kong had initiated a cross-border payment trial for Bank of China customers at select retail stores in the region.
This trial marks the third cross-border experiment with the Central Bank Digital Currency (CBDC) in Hong Kong. The initiative aims to promote wider adoption of the digital yuan and enhance its cross-border functionality within the region.
Bank of China Contributes to Significant Surge in Digital Yuan Transactions
In a bid to promote the adoption of the digital yuan, Bank of China Hong Kong (BOCHK) initiated a groundbreaking trial last year, encouraging customers to embrace the BOC e-CNY wallet. The program offered an enticing incentive of $14 (equivalent to 100 yuan) for users to be utilized at the popular Hong Kong supermarket chain, U Select.
The move was part of the Central Bank’s efforts to drive the adoption of the digital yuan, commonly known as e-CNY, and introduce its application into the daily lives of the citizens. With the growing trend of digital payments and cryptocurrencies, central banks worldwide have been exploring the potential of digital currencies, aiming to enhance financial inclusivity and revolutionize traditional banking systems.
In January of this year, the Central Bank took another significant step by integrating smart contract functionality into the digital yuan. This strategic move aimed to expand the use cases of the e-CNY and create a more seamless and efficient payment experience for users.
As a result of these efforts, the volume of digital yuan transactions has witnessed a staggering increase, surpassing previous milestones. Recent data reveals that the total value of digital yuan transactions has exceeded an impressive $250 billion. This represents a remarkable growth of over 70% from the figures cited by the bank in August 2022.