CBDC Insight | Jul 24, 2023
China’s digital yuan, also known as e-CNY, is experiencing a significant surge in transactions, reaching 1.8 trillion yuan ($249.33 billion) by the end of June, according to the country’s central bank governor, Yi Gang, and as reported by Reuters. This marks a substantial increase from over 100 billion yuan in August of the previous year.
The digital yuan’s rapid adoption underscores China’s pioneering role among nations developing their own central bank digital currencies (CBDCs). Despite being in the early stages of adoption, the e-CNY has primarily been used for domestic retail payments.
During a lecture organized by the Monetary Authority of Singapore, Yi Gang revealed that the digital currency in circulation had reached 16.5 billion yuan as of end-June. The total e-CNY transactions hit 950 million, with 120 million wallets being opened. However, the e-CNY in circulation only accounts for 0.16% of China’s M0 money supply, or cash in circulation.
Yi Gang emphasized the efficiency of the digital yuan, stating:
“the balance is very small, but with this kind of balance (we) support a big number of transactions, which means that the velocity is high and more efficient.”
Last year, Chinese state-owned banks participated in a cross-border transactions trial developed by the Bank of International Settlements. The trial further solidified China’s position in the global digital currency landscape.