- The Bank of China has said $300 million in Digital yuan has been spent.
- This comes after the bank worked with large companies to distribute $1.5 millions worth to lottery winners.
- China is the most advanced large nation to bring a digital currency to this stage of development.
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The People’s Bank of China’s CBDC pilot program has seen $300 million worth of Digital yuan spent, as of Nov 2, 2020. This occurred over four million separate transactions.
China’s Digital Future
While the race for a large economy to launch a digital currency continues unabated, China is making some headway. Yi Gang, governor of the People’s Bank of China (PBoC), has stated that over 2 billion yuan have been spent since the program’s launch. That adds up to ~$300 million at exchange rates as of writing.
As part of an ongoing Central Bank Digital Currency trial, the PBOC handed out 1.5 million yuan in October. The lucky winners each earned around 200 yuan (about $30) and diffused their digital yuan into circulation.
But the Yuan does more than simply compete with other digital payment systems. The PBoC also intends to work with other digital payment services like WeChat and Alipay. While the PBOC issued the digital currency, big companies and other banks actually took part in the currency distribution.
Yi made his announcement while speaking at “Fin Tech” week in Hong Kong. According to the governor, payments were made in over 12,000 different scenarios.
He cautioned that while trials are going smoothly, the digital Yuan was still in its early stages. He said the new type of currency would require a “fairly complicated” legal framework before being fully integrated with traditional cash.
A First Among Nations
While digital currencies like bitcoin (BTC) grow in popularity along with corporate, private currencies like Facebook’s Libra, governments worldwide have been trialing their own CBDCs. According to the Bank of International Settlements, 80% of central banks are considering some form of CBDC.
European Central Bank (ECB) President Christine Lagarde asked for the public’s opinion regarding a digital euro over Twitter. In her Nov 1, 2020 tweet, she said the ECB would seriously consider a digital euro.
Even the United States is getting on board. Federal Reserve Chairman Jerome Powell has said that a digital dollar might be considered, but that the US needed to “get it right,” not get it first. And the US’s northern neighbor is even considering digital currency
Other nations such as the Bahamas have already officially launched CBDCs. Cambodia has planned a digital currency that will work via a mobile app and change hands with QR codes. However, none appear to be on the scale of China’s massive economy. Nor are any as widespread or as utilized as the digital yuan.
As for China, governor Yi said he saw digital currency and cash “coexisting in the future.”