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China is among the jurisdictions that have made major advancements with its plans for a central bank digital currency (CBDC). A report by the Xinhua News Agency said that the head of monetary policy at the People’s Bank of China, Lan Zou, announced that the country wanted to expand the testing phase for the digital yuan.
China’s central bank to expand testing for a CBDC
Zou said that the number of testing locations for China’s CBDC would be increased from 11 to 23. China’s plans to test a CBDC have been in motion for several years, with the country rolling out its CBDC in 15 of the 31 provinces and autonomous regions.
The People’s Bank of China regulates China’s banking and monetary sector. The institution is also behind developing the digital yuan and has been actively involved in the country’s CBDC plans.
Zou was speaking during a press conference on Wednesday, where he praised the success of the country’s CBDC. The executive pointed to the strides that the CBDC had achieved during the first half of 2022. This includes having the CBDC used as a means of payment during the Beijing Olympics.
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Zou also said that the digital yuan had become very effective as a tool that could boost the quality of life and improve consumption and local demand. The e-CNY will also be effective in economic development by supporting functions such as promoting the utility of its smart contracts.
Growing adoption of digital yuan in China
The latest data from China shows that the adoption of the digital yuan in the country has increased significantly. As of May 31 this year, consumers based in China have spent around 83 billion yuan, equivalent to $12.35 billion in CBDC transactions. The number of transactions made via the digital yuan is 264 million.
Over 4,567,000 merchants located across China have started accepting the digital yuan. Zou noted that the country wanted to increase the number of transactions done through the digital yuan, and this would be achieved by expanding the testing locations for the CBDC. Making the CBDC available in different locations would make it more accessible. Zou also said that the PBoC wanted to boost the technology capabilities of the CBDC.
China has been dealing with strict lockdowns caused by the COVID-19 pandemic. Despite these challenges, the country’s provincial and municipal officials have partnered with tech experts to launch e-CNY airdrops. Those who receive the digital yuan via the airdrop can use it on specified platforms and merchants. The digital yuan can also be used to pay for taxes and other bills.
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