China's CBDC used in over 3 million transactions during pilot test

Over $160 million sent and received via China’s DC/EP

The People’s Bank of China’s (PBOC) deputy governor Fan YiFei says that China’s central bank digital currency (CBDC), the DC/EP, has been used in over 3.13 million transactions with a valuation of roughly 1.1 billion yuan ($162 million). According to YiFei, over 113,300 million consumer wallets and 8,800 corporate wallets have been created, and the PBOC has discovered 6,700 different use cases for their digital currency. YiFei made these announcements while speaking at the Sibos 2020 virtual conference on October 5.

The closest country to launching 

China seems to be the country that is closest to launching its CBDC. Although several governments around the world are interested in digitizing their money, no country seems to be as far along in terms of developing and launching a CBDC as China is. So far, DC/EP pilots have been completed in Shenzhen, Suzhou, and Xiong’an and China has plans to run a pilot at the 2022 Winter Olympic in Beijing.

The PBOC has found that they can use the DC/EP in many different ways, “In cross-border payments, we could achieve interoperability and address the trilemma – low costs, low risks, high efficiencies – by using digital fiat currency,” said Yifei,

“to protect fiat currency from these crypto-assets and safeguard monetary sovereignty, it is necessary for the central banks to digitize banknotes through new technologies. In recent years, with the development of distributed ledger technology and crypto assets, such as bitcoin, stable coins have emerged and triggered a new wave of competition attempting to reap profit from substituting the fiat currency in circulation.”

The future of money

Digitizing money will most likely be the next evolution of money; putting the monetary system onto a blockchain provides for better transparency, easy audits, as well as faster payments and settlements at a lower cost. Many countries and banks around the world including the United States and the European Central Bank currently have their eye on the CBDC space.

Recently, the European Central Bank released a comprehensive report titled “report on a digital euro” saying that the ECB must be prepared to issue a digital currency when the need for it arises. 

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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