China’s Digital Yuan Making Steady Progress
The entire world has been fascinated by the quick spread of China’s e-Yuan across its provinces. Unfortunately, China’s security agencies also recorded the first e-Yuan-related crime. Early this month, 11 persons were arrested for attempting to launder the national digital currency.
It took the combined efforts of Xinmi Security agents and the anti-fraud unit of Zhenzhou Security Bureau to put these money launderers behind bars. However, the unfortunate incident hasn’t dampened the optimism surrounding the e-Yuan launch. Yi Gang, China’s apex bank governor, even delivered a talk regarding the progress made with the national digital currency.
Yi’s Claims
The central part of Yi’s speech contained updates on the e-Yuan, its new features, scalability of adoption, and the bank’s policy. Yi further disclosed that as of early last month, “e-Yuan transaction volume has exceeded RMB 55B, with more than 120m opened personal wallets and over 3m pilot situations.”
However, he dismissed the notion that the widespread adoption of the digital Yuan means there will no longer be any use for the fiat currency or other means of transaction. He said, “cash will still be in use for the foreseeable future, especially as our country is diversely developed with a huge population. We will still be making cash available so long there is demand for it.”
e-Yuan Updates
Yi also disclosed the plan to introduce three features to the digital Yuan to enhance security. He also said that the e-CNY wouldn’t be an interest-bearing asset to avoid competing with the banks. He stated that the apex bank would be solely responsible for issuing the e-CNY, with other financial institutions as intermediaries.
Then, he made clarifications regarding wallet limits, transaction limits, and other limits already in place regarding the digital Yuan. Regarding privacy, Yi revealed that “anonymity is only possible on small transactions and not large ones.” He further claimed that policies might be created to make it mandatory for the apex bank to report to the authorities.
Yi disclosed that China’s apex bank wouldn’t mind working with other Asian apex banks to create an inter-CBDC bridge for international payment settlements. It has started the discussion with other apex banks. He added that “we are also in discussion with the ECB regarding this inter-CBDC bridge.”
Private Digital Currencies Are Still Active
A local news outlet, Xinhua-Net, has revealed that many citizens are still using private digital wallets despite the ban on crypto-related activities in the country. The media firm stated that a search for crypto-related keywords (such as blockchain and metaverse) in the search engines confirms this story. Some of the content for these keywords is either for promoting crypto-related training or events outside China.
Despite the broader adoption of digital currencies, most authorities are still concerned that their citizens will prefer private digital currencies to national digital currencies. Nevertheless, most nations continue to research and explore the launch of a national digital currency. The UK’s apex bank recently revealed that it would launch a new consultation next year to determine whether it would move to the next stage of developing its national digital currency.
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