In a significant push to the development of its Central Bank Digital Currency, China’s Central bank has launched a pilot version of its wallet app, which it hopes will promote the use of the digital Yuan amongst more people.
The wallet is available on China’s Android App Store and also on Apple’s App Store.
China’s Digital Yuan
The e-CNY or the Digital Yuan is exactly what the name suggests, a digital version of China’s Yuan. It has been in development since 2014, and unlike cryptocurrencies such as Bitcoin, it will be controlled and issued by the People’s Bank of China.
China has been conducting several trial runs in the country, where users in cities have been given a certain amount of the digital currency to spend. Prominent retailers based in China, such as JD.com, a prominent e-commerce firm, have also accepted the CBDC as payment during the previous year.
Official Rollout Still A While Away
While The Digital Yuan has been in development for a considerable amount of time, there is no clear timeline for its rollout, which means that the official rollout of the Digital Yuan is still some way away.
For now, the Digital Yuan wallet enables users in major cities such as Beijing and Shanghai to use it. Initially, the app was available only on an invitation basis but has recently been made available to everyone for download, highlighting Beijing’s renewed push in the development of its CBDC.
Winter Olympics Trial Run
The Digital Yuan will feature prominently in the Beijing Winter Olympics Area. The app specifically lists out this detail, with the Winter Olympics set to take place in the Chinese capital. The People’s Bank of China has been pushing for the Digital Yuan to feature prominently during the Winter Olympics. However, the digital wallet faces significant competition from payment apps that dominate the Chinese market, namely Ant Group’s Alipay and Tencent’s WeChat.
China’s CBDC Has Little In Common With Cryptocurrencies
According to Martin Chorzempa from the Peterson Institute of International Economics, China’s digital Yuan is very different from cryptocurrencies such as Bitcoin and Ethereum. He called the CBDC much safer than cryptocurrencies thanks to their stability, unlike cryptocurrencies that are highly volatile.
“I would say the safety levels (of the digital yuan are) very high, and the risk is low,” he said. “It’s designed to have the same value as any regular renminbi, so there should be no price fluctuations to worry about.”
Pilot Run Yields Transactions Worth $5.34 Billion
The People’s Bank of China revealed some staggering numbers from the pilot run of its digital Yuan, showing transactions worth 34.5 billion Yuan or $5.34 billion as of June 2021. The Central bank stated that the CBDC had been used for over 70 million payments across more than 1.3 million scenarios, showing the immense reach of the digital Yuan.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.