China’s Digital Yuan Little Used, Former Central Bank Official Says
Trials of the digital yuan have produced disappointing results, according to a report quoting the former head of research at the Chinese central bank. The new form of national fiat has brought no benefits to the banks and should expand beyond being employed only as a substitute for cash, the banker believes. Common People Used to Cash and Cards, Ex-PBOC Executive Notes
Usage of China’s central bank digital currency (CBDC) has been “low, highly inactive,” according to Xie Ping, former director-general of research at the People’s Bank of China (PBOC). Ping made this observation at a conference devoted to digital finance.
“The cumulative circulation of the digital yuan in the two years of the trial has been only 100 billion yuan” ($14 billion), he detailed, quoted by the financial news outlet Caixin and Reuters. In his view, the application of the digital yuan needed to be widened.
“The results are not ideal,” Xie concluded during the forum which was organized by the Tsinghua University. He emphasized that “what needs to change is the digital yuan acting only as a substitute for cash and only for consumption.”
The payment market structure formed by cash, bank cards, and third-party payment platforms are currently satisfying the needs for daily consumption in China. “The common people are used to it, and changing it is difficult,” he remarked.
China has been at the forefront of the race to develop CBDCs with efforts to promote the digital yuan through a number of red envelope campaigns, giving away e-CNY to stimulate its use, and by expanding the geographical scope of the pilot project to new cities and regions.
Authorities have also been trying to increase the use cases for the digital version of the renminbi, with the latest examples including the introduction of digital yuan payments in the public transportation systems of Ningbo and Guangzhou. In September, the PBOC called for more of these use-case scenarios and urged for deeper integration of its new currency with e-payment providers.
According to Xie Ping, digital yuan business had no synergistic effect and no commercial benefits for banks’ business while third-party payment systems such as Alipay offered a range of more attractive functions such as investment, insurance, and consumer lending.
That’s why the ex-central bank official believes digital yuan usage can be expanded by allowing individuals to buy financial products with the state-backed coin, for example, and by connecting it to more traditional payment platforms in order to create new opportunities to spend it for consumption. Tags in this story CBDC, CBDCs, Central Bank, China, chinese, Circulation, Crypto, Cryptocurrencies, Cryptocurrency, Digital Currency, Digital Yuan, former official, Official, PBOC, trials, use, use cases, Yuan
Do you think use of the digital yuan will grow with an increase in the use-cases offered by the Chinese government? Share your thoughts on the subject in the comments section below. Lubomir Tassev
Lubomir Tassev is a journalist from tech-savvy Eastern Europe who likes Hitchens’s quote: “Being a writer is what I am, rather than what I do.” Besides crypto, blockchain and fintech, international politics and economics are two other sources of inspiration. Central Bank of Turkey Reports First Payment Transactions on Digital Lira Network FINANCE | 14 hours ago ECB to Decide Whether to Issue Digital Euro in 2023 FINANCE | Dec 24, 2022
Image Credits: Shutterstock, Pixabay, Wiki Commons Previous articleInsurance Giant Tokio Marine to Offer Its Services in the Metaverse Next articleMark Moss Predicts Regulatory Shakeup and End of Crypto Bull Runs, but Believes Bitcoin Will Endure Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article. Read disclaimerShow comments More Popular NewsIn Case You Missed ItDraft Law Regulating Aspects of Crypto Taxation Submitted to Russian Parliament
A bill updating Russia’s tax law to incorporate provisions pertaining to cryptocurrencies has been filed with the State Duma, the lower house of parliament. The legislation is tailored to regulate the taxation of sales and profits in the country’s market ... read more.UAE Airliner Emirates to Launch NFTs and Experiences in the Metaverse Interest in Real Estate Investments in Spain Grew 400%, With Some Using Crypto and Stocks as Payment Method Digital Ruble ‘Much Needed,’ Russia’s Central Bank Says, Won’t Delay Testing Economist Predicts the Fed"s Response to Inflation Will Push Crypto Higher