The People’s Bank of China (PBoC) has announced that it will be shifting the frontiers of the digital yuan to four additional regions. According to the South China Morning Post, the digital yuan will be tested in provinces, away from the limitations of small cities, as it inches toward a full-scale launch.
The provinces include Guangdong, Jiangsu, Hebei, and Sichuan, which are commercial hubs in their own right. The densely populated regions will allow the PBoC to pilot the central bank digital currency (CBDC) application with a wider pool of participants.
PBoC deputy governor Fan Yifei noted in a financial forum in Suzhou, a city in the Jiangsu province, that adoption rates for the digital yuan were already breaking records. Yifei did not unveil the exact statistics, but at the last count in October 2021, there were 261 million unique users of the platform, and downloads of the mobile application were through the roof.
Since October, the number of unique users has doubled, according to analysts, which resulted from the PBoC’s move to increase test cities as 2022 began. In April, testing extended to the cities of Fuzhou, Tianjin, Chongqing, Xiamen, and six other metropolises expected to hold the 2022 Asian Games.
“Policies must be designed to stimulate creativity and enthusiasm among the banks, technology firms, and the local government in the development, promotion, and proliferation of the digital yuan,” said the central bank concerning the direction of the CBDC.
The digital yuan has seen application in the transportation sector of Xiamen and Guangzhou. Users of trams and trains in the cities can pay for their fares using the digital yuan as transaction volumes ballooned to over $11 billion.
Despite the expansion, privacy concerns continue to plague the CBDC
Without a doubt, the digital yuan has emerged as one of the leading CBDC test pilots in the world, ahead of jurisdictions like the United States, the United Kingdom, and Russia. However, as the world anticipates a full launch, the digital yuan has been plagued with privacy concerns, with analysts pointing out that the government would be privy to parties’ identities and transaction details.
These led a trio of U.S. senators to propose a ban on the digital yuan from the country on the grounds that the “Chinese Communist Party will use its digital currency to control and spy on anyone who uses it.”
The Chinese embassy in Washington debunked the allegations as being baseless and assured users that the PBoC would protect the privacy and data of users of the digital yuan.
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