China has been strictly against using cryptocurrencies but has proactively participated in integrating its central bank digital currency (CBDC). The People’s Bank of China (PBoC), the Chinese central bank, has started involving the CBDC (e-CNY) in reports measuring the amount of currency in circulation.
As per a financial statistics report released on Wednesday, the central bank said there were 13.61 billion digital Yuan ($2 billion) in circulation as of December 31. The currency in circulation grew at a rate of 15.3% in December, with the broader money supply reported to be 266.43 trillion yuan.
The central bank’s report commented that the addition of the digital Yuan had not caused “notable changes” to growth rates. As per figures, the 13.61 billion e-CNY roughly represents 0.13% of the total 10.47 trillion yuan that was put in circulation at the end of the last year.
China is the second largest economy in the world and one of the tech-savvy nations. It was also one of the first nations to have begun the trial of a CBDC in its select cities and regions. Eventually, the project was made available to foreign athletes visiting the Beijing 2022 Winter Olympics in February last year.
In April 2022, Todayq News reported that the nation started with its first pilot and 130,000 residents of Shenzhen were to receive 15 million yuan from the government of Shenzhen’s Futian district. Shenzhen is China’s third most populous city and one of the first pilot cities for the CBDC; however, more cities were added to the central bank’s list.
Reportedly, 15 million yuan or $2.27 million were estimated to be distributed to local citizens by the end of the month in digital form (e-CNY). In addition, as per the Global Times, around 130,000 red packets were to be distributed through a lottery via Wechat payment. Furthermore, around 5,000 stores had announced accepting the e-CNY without absurd requirements like minimum purchase.
In September last year, the central bank announced its plans to expand the deployment of CBDC to Guangdong, Jiangsu, Hebei, and Sichuan provinces at an appropriate time. But neither the government nor the bank had revealed a plan for rolling out the CBDC to the entirety of China’s 1.4 billion residents.
Also, in the last week of December, a former Chinese central banker expressed disappointment with the low adoption and usage of the e-CNY. He said that as of October last year, the cumulative digital Yuan transactions had only crossed over 100 billion Yuan ($14 billion).