The central bank digital currency (CBDC) is already being used to make payments on home deposits, arrange insurance and issue large loans in China. The digital yuan (e-CNY) has appeared in the mobile app of one of the world’s largest banks. The retail use of Chinese CBDC is also growing noticeably.
The digital yuan was first used to pay for housing deposits in China’s Guangdong province. According to a local media report, funds to the account of the Shenzhen Housing Provident Fund Management Center “arrived in seconds.” The focus is on the simplicity of such payment for both parties. The sender made the e-CNY transfer using a digital wallet. The recipient was not required to take any action at all, thanks to the automation of transfers operating on the distributed ledger technology (DLT).
China Construction Bank, one of the world’s biggest banks, has also added the ability to use e-CNY to its mobile app. Local media report that the app’s new features allow users to pay for banking products with digital currency. For example, the digital yuan was used to pay for vehicle insurance for the first time.
Representatives of China’s largest bank, the Agricultural Development Bank of China (ABC Bank), informed about a commercial loan of $224,000. The loan was given to a local manufacturing firm suffering from the pandemic, and the payment was made entirely in the digital yuan.
The retail use of Chinese CBDC is also on the rise. On the eve of China’s Black Friday shopping festival 618, taking place on June 18, major Chinese marketplace JD.com and partner banks gave away about $1.5 million in digital yuan to would-be shoppers in 23 cities. According to JRJ, the Chinese spent about 400 million e-CNY (~$60 million) on the marketplace over an 18-day festival.
The People’s Bank of China reports that about 261 million e-CNY wallets and ~$14 billion in transactions were opened in 2021, with over 100 million more users gaining access to the digital yuan in April 2022.
