[Weekly e-CNY] People's Bank of China Is Establishing a Digital Yuan System Accepted in Entire Chinese Society

The digital yuan (e-CNY) is a digital legal currency (CBDC) issued by People's Bank of China(the Central Bank of China). This year, the Chinese government introduced digital yuan payments to China's largest payment services such as WeChat and Alipay.

Since CBDC competition affect the fate of furue digital financial supremacy, the digital yuan, which is being considered currently at the forefront, has became a primary concern for governments.

At August 2022, The vice president of the People's Bank of China said, "The entire society should promote the digital yuan ecosystem."

These are the main issues on the digital yuan.

◇1. China People's Bank Vice President "Building a Digital Yuan Ecosystem"
According to Sina Finance, Fan Yifei, vice president of the People's Bank of China, told the 5th Digital China Construction Summit to build an "open digital yuan ecosystem." To acheive it, he explained that the entire society should promote the construction and sharing of digital yuan and the digital yuan should embark its functions that can be programmed with smart contracts.

◇2. People's Bank of China "Expanding the scope of digital yuan testing"
According to China's Science and Technology Innovation Committee Daily, the People's Bank of China, the central bank of China, recently proposed to steadily expand the scope of the digital yuan pilot test at a business meeting in the second half of 2022. In a release in July, the People's Bank of China said, "The digital yuan pilot project has been expanded from the existing '10+1' pilot area to 23 regions in 15 provinces and cities, and four regions including Shenzhen, Suzhou, and Xunanxin."

◇3. Vending Machine Accepting Digital Yuan Payment
The Xiao Xiang Morning Herald recently reported that a digital yuan payment option appeared at the 'Smart Bookstore', a book vending machine at the Changsha subway station. The explanation is that you can buy books by opening a digital yuan app and scanning the code. So far, 30 smart bookstores in Changsha have processed the digital yuan payments.

◇4. China's Large Retailers Implement Digital Yuan Pilot
The National Business Daily said that Shanghai Bailian, a large Chinese retailer, has launched a pilot program to apply digital yuan on investor interaction platforms such as AliExpress.

◇5. The Appearance of Digital Yuan Payment Hospital in Huzhou
The People's Daily recently reported that a patient paid 15 digital yuan at Deqing County Hospital in Huzhou. This is the first time that digital yuan has been used in Huzhou's medical system.

◇6. Suzhou City, Digital Yuan Loan Secured by Intellectual Property Rights
According to the Modern Express at Aug. 5, 2022, the Changjagang (Jangga Port) Rural Commercial Bank in Suzhou recently lent 500,000 digital yuan as intellectual property collateral for the first time in China. The company that received the mortgage loan is the manufacturer of environmental protection equipment for the steel plant in Zhangjiajiang.

The Chinese government predict that the digital currency will move through furture financial trends. Therefore the Chinese government has been implementing policies that lead the digital financial market including the digital currency.

권승원 기자 ksw@