China is expanding its central bank digital currency (CBDC) pilot to include more cities, including those in its coastal regions which will be hosting the upcoming Asian Games.
The People’s Bank of China (PBoC) has been conducting digital yuan pilots for several months now in major cities, including Shanghai, Shenzhen, Suzhou, and Qingdao. It also debuted the digital currency at the Beijing Winter Olympics in February, where it was one of three payment methods alongside cash and Visa.
However, unlike earlier projected, it wasn’t a big hit, partly because of COVID-19 restrictions, which kept out foreign spectators, and partly because the digital yuan hasn’t really caught on outside the pilots in which the public receives free money.
Now, the PBoC is widening its digital yuan testing scope to twice the current size. This includes cities such as Xiamen and Fuzhou in the eastern province of Fujian, Guangzhou in the southern Guangdong province, and Tianjin and Chongqing municipalities.
The pilot tests will also extend to six cities in Zhejiang province, hosting the 2022 Asian Games, the PBoC said in its statement. Also known as Asiad, the multi-sport event is the second-largest in the world after the Olympics. It brings together participants from 45 countries, including India, Thailand, China, Singapore, the Philippines, Japan, Indonesia, and South Korea.
After failing to make the statement it intended with the Beijing Winter Olympics, the PBoC will be looking to impress with the upcoming event. In Beijing, the government has banned Alipay and WeChat Pay, the two dominant mobile payment methods most Chinese residents use.
While many spectators at the event said they ended up using cash or Visa as they didn’t have e-CNY, the PBoC claimed that some 2 million yuan ($316,000) worth of payments was made daily in its digital currency.
In 2021, around $13 billion worth of payments were made in the digital yuan, according to the PBoC. The bank also revealed in November last year that at least 10% of Chinese citizens had at one point used the digital currency, with the digital yuan wallet launching on app stores in 11 cities in January 2022.
To learn more about central bank digital currencies and some of the design decisions that need to be considered when creating and launching it, read nChain’s CBDC playbook.
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