The People’s Bank of China (PBOC) has included its Central Bank Digital Currency (CBDC) in official cash reports for the first time. 

As reviewed by South China Morning Post, the digital China’s Yuan also known as e-CNY, which amounted to 12.61 billion yuan ( roughly $2 Billion) by the end of December, which converts to 0.13% of China’s outstanding monetary base supply.

In 2019, it was announced to launch in public testing in April 2021. CBDC of China has already paved its path into 26 different cities and is now into the hands of 5.6 million merchants. 

Digital Yuan, unlike other cryptocurrencies such as ether or bitcoin, doesn’t function on distributed ledger and blockchain technology, it cannot be related to other related decentralized assets or USDC, tether like stablecoins.

China’s digital yuan is more like a fiat currency as it is issued by the Chinese government. It works similar to traditional currency on fiat-powered apps like Apple Pay.

In the past year, Bank of China located in Hong Kong provided 500 users the availability and opportunity to open trial accounts. In which they will get 100 E-CNY, which the users can spend on supermarkets, local stores available across the mainland.

This project had received great interest and accounts were taken over within a couple of days. Another scheme introduced by China was “red packet” where they gave lottery giveaways which amounted to 40 million digital yuan ($6.2 million).

In October, PBOC stated that in CBDC transactions, they have processed approx 100 billion yuan ($13.9 billion), however, the figures given by then were not verified.

It is not yet clear how e-CNY have the potential to influence digital space including online payments and monetary policies in China. Beijing is already working to implement CBDC at scale.

The aim of China to push CBDC can be part of the plan, where they want the yuan to be a dominating currency while making global transactions, and moreover by this development they will be pushing the yuan’s status as a potential reserve asset.

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