China’s digital yuan has hit the ground running and over 140 million Chinese residents have used it, the country’s central bank has revealed. Speaking at a recent event, a top official announced that close to $10 billion has been transacted via the digital currency and dismissed mounting fears over user privacy.
China has been at the frontline in the central bank digital currency (CBDC) race and has been working on its digital renminbi for over five years now. Its official launch is edging closer, and according to figures shared by one top official, the Chinese public is already embracing the digital yuan.
Speaking at the Hong Kong Fintech Week, the Director-General of the Digital Currency Institute at the People’s Bank of China (PBoC) Mu Changchun revealed that 10% of the population had used the digital yuan as of October. Of the 140 million e-CNY wallets, 10 million were corporate, he added.
Changchun further told the conference that the users had transacted 62 billion yuan ($9.7 billion) worth of the digital currency, which is also known as the digital currency electronic payment (DC/EP). About 150 million transactions spread across over a dozen regions, including Shenzhen, Chengdu, Shanghai, and Beijing.
One of the biggest concerns with the DC/EP is privacy. The Chinese government has been accused in the past of using extreme tech measures to keep an eye on its people. The digital yuan could give it the ultimate tool of mass surveillance, some experts have warned.
Changchun addressed these concerns, stating that the central bank allows anonymous transactions for those not moving huge sums of money.
Digital yuan operators can open four types of accounts for their customers, he stated. In the lowest tier, all that a customer needs is a phone number and so his transactions would be anonymous even to the central bank. Such a wallet is limited to 5,000 yuan ($780) in daily transactions and 50,000 yuan ($78,100) annually.
The highest privileged e-CNY wallet has no transaction cap and it can only be opened at a bank with verification details required.
Whichever wallet tier a user chooses, he should know that the PBoC will not share his data with any other agency unless authorized by law, the director-general told the conference. In addition, he added that the bank would collect less data than most of the payment systems in the market.
The Chinese government has been reported going the extra mile to boost digital yuan adoption. As CoinGeek reported recently, the government has been pushing American companies such as McDonald’s to accept digital currency.
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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