Status : Pilot
Usecase : Retail, Wholesale
China launched the Digital Currency Electronic Payments (DCEP) project, also known as e-CNY, in 2017. The pilot program started in April 2020, initially in four cities and later expanded to twenty-eight major cities. As of June 2021, over 20.87 million personal and 3.51 million corporate digital yuan wallets had been opened, with a total transaction value of around $5.39 billion. By October 2021, the number of individual wallets reached 123 million, with a transaction volume of 142 million and a transaction value of approximately $8.8 billion. China is integrating existing payment channels with e-CNY, and AliPay started offering e-CNY in the express payment category in 2023. The digital yuan represented 0.13% of cash and reserves held by the central bank in January 2023.
The People’s Bank of China is also working on cross-border projects. In February 2021, they joined central banks from Thailand, the United Arab Emirates, and Hong Kong to explore the Multiple Central Bank Digital Currency (m-CBDC) Bridge project. In July 2021, foreign travelers to China could use e-CNY without domestic bank accounts by providing their passport information. Testing for cross-border use of e-CNY in Hong Kong has begun, with the aim of broad circulation in 2022. During the Olympic Games in Beijing and Zhangjiakou in February 2022, visitors could use the e-CNY application and card, with daily transactions reaching “a couple of million RMB” or over $300,000.
The motivations behind the e-CNY project include improving the efficiency of central bank payment systems, providing a backup to the commercial retail payment system, and promoting financial inclusion. Sources for this information include the People’s Bank of China, Atlantic Council Research, CNBC, and CoinDesk.
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