Digital Yuan Usage in China Leaps 1,800% in Past 12 Months

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The dig­i­tal yuan is gain­ing trac­tion in Chi­na with the num­ber of wal­lets grow­ing expo­nen­tial­ly to 261 million.

Reports say the use of the dig­i­tal yuan cen­tral bank dig­i­tal cur­ren­cy (CBDC) increased by 1,800% in the last year, espe­cial­ly dur­ing the recent 618 fes­ti­val, which is sim­i­lar to Black Friday.

The People’s Bank of Chi­na said that trans­ac­tion vol­umes using the dig­i­tal yuan reached $13 bil­lion by the end of 2021.

Chi­na has been ramp­ing up its efforts to pro­mote the use of the dig­i­tal yuan using sev­er­al lot­ter­ies to expand usage and test the cur­ren­cy. The coun­try has sent assets via a red enve­lope lot­tery, and over 20 cities are now involved in the pilot program. 

China hopes to launch digital yuan soon

The gov­ern­ment is hop­ing to offi­cial­ly launch the dig­i­tal yuan as soon as pos­si­ble, some­thing which oth­er gov­ern­ments are tak­ing note of.

The dis­trict of Chongqing was the most recent to launch a pro­gram for the dig­i­tal yuan. It will see a tax pay­ment pilot pro­gram for the CBDC, just one of many tri­als being con­duct­ed in the country.

The wal­let is avail­able on both Android and iOS, and most Chi­nese adults have a favor­able opin­ion of the e‑CNY app. 72% have said that they use the app for online shop­ping, while 67% said they use it for pay­ing for pub­lic ser­vices such as transportation.

Cit­i­zens are see­ing ben­e­fits in the app, and many cite gov­ern­ment over­sight and stream­lined trans­fers as the biggest advan­tages. They also believe that it will help China’s econ­o­my grow and become a glob­al leader.

The progress of Chi­na and the growth of the cryp­to mar­ket has spurred oth­er coun­tries to con­sid­er CBD­Cs. Over 90% of cen­tral banks are now look­ing into CBD­Cs, with 60% of them work­ing on proofs-of-concept.

Some are using exist­ing solu­tions, for exam­ple, Norway’s cen­tral bank is choos­ing an Ethereum L2 project for its CBDC test. While oth­ers pre­fer to mod­el their CBDC after the likes of Swe­den and Japan.

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