China’s Digital Yuan (e-CNY) Surpasses $250 Billion in Transactions by June, Paving the Way for a Cashless Economy
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The governor of China’s central bank recently announced that the country’s digital currency (CBDC) usage had reached 1.8 trillion yuan ($250 billion) by the end of June, indicating widespread adoption. In addition, the amount of digital yuan in circulation has now reached 16.5 billion yuan.
These figures demonstrate that more and more people are using digital currency for transactions, and it is becoming increasingly popular in China’s economy.
China's Central Bank: Digital Yuan Transactions Reach $250 Billion pic.twitter.com/XPQGUlp3zY
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The increasing popularity of the digital yuan is a result of China’s push towards modernizing its financial system and transitioning to a cashless society.
China’s e-CNY Gains Popularity as Digital Currency Usage Grows
According to Yi, the leader of China’s central bank, their digital currency, e-CNY, had 16.5 billion yuan in circulation by the end of June. People carried out 950 million transactions using the digital yuan, and around 120 million wallets were opened to use it. These numbers illustrate that e-CNY is becoming increasingly popular in China’s economy.
Although e-CNY’s circulation is currently only 0.16% of China’s M0 money supply (physical cash), Yi stressed that it is small. Nonetheless, digital currency has proven to be highly efficient given that it supports many transactions even with this small balance. This means that money is transferred quickly between people and businesses, making the digital currency a highly effective form of payment.
Therefore, despite being just a small fraction of physical cash, the digital yuan is gaining popularity. Its fast transaction speed makes it efficient, allowing many people to use it for their daily transactions with ease. As China continues to adopt and integrate digital currency, it may become an integral part of its economy in the future.
Digital Yuan: Transforming China’s Economy
In 2019, the People’s Bank of China (PBOC) introduced a new digital currency known as the digital yuan. This currency has undergone testing in various cities across China, including Suzhou, Shenzhen, Xiongan, and Chengdu. For instance, the city of Jinan began accepting digital yuan payments for public transportation fares in July, making it more convenient for people to use digital currency in their daily lives.
The digital yuan is quickly gaining popularity in China. The Shanghai Clearing House is now supporting it for transactions and settlements, which makes it easier for businesses and banks to use digital yuan for their dealings. This marks a significant step towards more people using this new currency in the future.
The Bank of China is also participating in digital yuan testing. They are experimenting with different ways to use it, such as SIM cards and NFC payments so that people can make payments using their phones and other devices.
China’s central bank, along with different cities and organizations, is excited about the digital yuan and its benefits. As more trials occur and more people use it, it has the potential to revolutionize how transactions work in China, leading to a faster and more modern economy.
