During Hong Kong Fintech Week, People’s Bank of China (PBoC) governor Yi Gang gave several updates on the digital yuan (DC/EP).
More than 2 billion yuan ($299.07 million) worth of DC/EP has been exchanged in roughly 4 million separate transactions. According to Yi Gang, there are about 12,000 different payment scenarios in which the DC/EP can be used and the digital yuan is mostly being spent in four major cities–Chengdu, Suzhou, Shenzhen, and Xiong’An.
The PBoC issues the DC/EP to commercial banks and big tech companies and then leaves those entities in charge of distributing the digital currency to consumers.
Many people believe that China will be the first country to launch its CBDC; China is the furthest along in the roll-out and testing of its central bank digital currency and has even conducted an airdrop of its CBDC to get it into the hands of more consumers. An individual from the PBoC is also on the record saying that the DC/EP will be in use during the 2022 Beijing winter Olympics.
However, Yi Gang says that China still has a bit of a way to go before the DC/EP has its official launch. Yi Gang said that China still needs to develop a “fairly complicated and fairly complete legal framework” before the DC/EP can officially launch.
It’s only a matter of time
However, it is only a matter of time until China creates a legal framework for its central bank digital currency. No other country is as far along in its CBDC research, development, and piloting as China appears to be. Given the rate that China is making progress on its DC/EP, you would think that a legal framework solution is near.
Many countries are working on a CBDC of their own; recently, the Reserve Bank of Australia announced plans for a CBDC that would be used by wholesale participants for the funding, settlement, and repayment of a tokenized syndicated loan.
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.
New to blockchain? Check out CoinGeek’s Blockchain for Beginners section, the ultimate resource guide to learn more about blockchain technology.
