According to the Bloomberg report, Yi Gang, governor of the People’s Bank of China, said that the digital yuan pilots have processed over four million transactions to date, totaling more than 2 billion yuan ($299 million). The official delivered his latest remarks at the Hong Kong Fintech Week conference today. According to Yi, the pilots have been going smoothly so far, having rolled out for extended testing in four cities. Growth in demand for digital and contactless payment methods amid the ongoing global pandemic has posed major challenges for central banks.
“Fintech companies have some key advantages over commercial banks.”
The PBoC governor further noted that fintech companies have some key advantages over commercial banks in terms of building a customer base and managing risks. The PBoC launched the first pilots for its forthcoming digital yuan in April this year. The initial trial reportedly included four major cities: Shenzhen, Chengdu, Suzhou, and Xiongan. The program was reportedly expanded to nine cities, including Guangzhou, Hong Kong, and Macau. Earlier last month, the central bank officially announced that the digital yuan wallets processed $162 million in transactions between April and August 2020. Major tech companies have already begun preparing for the seemingly inevitable launch of the digital yuan.
Central banks continue to explore CBDCs.
China is all set to become the world’s first major nation to launch a central bank-backed digital currency. However, several other banks are also following China’s lead. Central banks across countries are experimenting with national digital currencies. Earlier, the U.S. Federal Reserve chairman, Jerome Powell, suggested the United States was waiting to get the right proposals in place, rather than becoming the first to launch in regard with a digital currency. Several other major central banks, including the Bank of Japan, the Philippines’ central bank, are also working on a CBDC.