The People’s Bank of China has launched a pilot trial digital yuan project to estimate the impact on China’s financial policies and monetary system. This was reported in the Bank’s whitepaper document that there had been more than ¥34 billion worth of deals. These deals cut across primary retail activities, public, and administrative services.
The central bank further affirmed that there is a plan to extend the project to be used for all transactions. It also intends to ensure adequate security and stability in the digital yuan. In addition, relevant legislation will also be laid down to curb mismanagement and misuse of the digital money.
The Pilot Trial Project of the Digital Yuan
Central Banks in major countries all over the world have been conducting research and development on the digital version of their currency. This is noticeable in nations such as Singapore, Britain, and Japan. The digital yuan is China’s central bank’s digital currency.
The trial project was launched in 2019 from 5 places. The places include major cities such as Shenzhen, Beijing, and Shanghai. During the trial, it was recorded that the number of personal wallets created stands at approximately ¥21 million, while that of organizations stands at about ¥3.5 million. The wallet was created on a variety of platforms, which includes phones and smart cards.
In spite of the current success of the widespread use of the digital yuan in this pilot test, the PBOC has not set a time scale for the full-blown use of its digital currency.
China Embraces Digital Currency Despite Cryptocurrencies Censor
The Pilot trial project is a welcome development from the People’s Bank of China, which has earlier placed censorship on cryptocurrencies and crypto mining. The development and usage of the digital yuan is seen as positive momentum for the general use and adoption of digital money.
The use of the digital yuan is set to attract more enthusiasts and investors into the economy, which will lead to more demand for the yuan as a whole. We are expected to see a steady appreciation of the yuan as the digital yuan becomes more accepted.
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