The trial experiment for the digital yuan will continue, according to China’s central bank. In 17 provinces, the CBDC is presently undertaking a trial phase.
After launching the currency in 17 provinces, the People’s Bank of China will continue to extend the pilot program for its central bank digital currency (CDBC). According to the Financial Association, the central bank will concentrate on developing a system that would enable customers to “scan with one code.”
The central bank intends to “continue to carry out new applications of the digital renminbi” in order to “realize the link between the digital renminbi system and traditional electronic payment instruments.” It has put a lot of effort into making the digital yuan a useful payment option. A CBDC fits with China’s present emphasis on digital payments.
Over the past 18 months, the central bank has gradually increased the CBDC’s reach and visibility. In order to encourage consumption and low-carbon travel, the PBOC has conducted roughly 30 “red envelope events” in pilot locations, as stated in the release.
It is obvious that China is eager to debut its digital yuan fully. Since the CBDC has been in development for some time, several nations are starting to see the value of digital currency.
China also wants to make changes to the digital yuan. Of those that have already been introduced, offline payments and smart contract capabilities stand out. Both of these would considerably increase the CBDC’s usefulness.
On January 23, the offline payment function went live. It enables customers to authenticate payments using NFC technology even without an internet connection or electricity. The e-commerce app Meituan also included the smart contract capability earlier this month. Users can win a daily reward of $1,312 that is distributed among winners thanks to the smart contract feature.
Other modifications to the usability of the digital yuan are also occurring. The central bank recently announced that in pilot areas, it will roll out wealth management products that accept CBDC payments.
Only a small number of consumers will have access to the wealth management services provided by investment bank China Galaxy Securities. But it’s a significant step forward and may signal a more open offering.