• Mon. May 20th, 2024

China’s Fujian Province Records $22B Worth Of Digital Yuan Transactions In 12 Months

Mar 20, 2023

The central bank digital currency (CBDC) has continued to enjoy wide use in China as residents and companies in the Fujian Province reportedly processed nearly $22 billion in digital Yuan (e-CNY) transactions from last year to date. The Fujian Province was one of several districts added to the country’s CBDC pilot phase last year.

Fujian Province Sees Record CBDC Transaction

Per reports, the province started its CBDC trial last October after it conducted China’s first digital Yuan land transfer deal. According to the province’s media outlet, Fujin News, official transaction figures show that commercial transactions by citizens have reached $14.5 million since the inception of the pilot phase.

In addition, the news platform noted that partners of the digital token had issued close to $9 million worth of the CBDC during promotional campaigns. Furthermore, 2,572 merchants and vendors within the Fujian Province accept payment in digital Yuan.

However, this number did not consider the toll gates across the busy Fujian-Xiamen Expressway. Meanwhile, increasing toll booths within the country allow drivers to pay their highway fees using the digital Yuan.

According to the province’s administrators, it has installed tax payment points for e-CNY in public places and banks within the region. According to the official statement from the provincial government, citizens and businesses had used the e-CNY to settle $254 million in taxes in the past year.

Moreover, since the first digital Yuan-powered land transaction in October, there have been 74 properties traded with e-CNY in the following weeks.

Expanding The Adoption And Use Of Digital Yuan

According to Fujin News, the province started issuing e-CNY relief loans to local enterprises last year. Additionally, the province utilizes the CBDC token to acquire carbon sinks for the region’s environmental sustainability efforts.

Based on the province’s estimate, it has processed 14,700 carbon sink payments using the digital Yuan since the project’s inception. In the future, the province noted that it seeks to expand the adoption and use of digital Yuan and is exploring using the token in smart contracts and supply chain management and financing.

In another development, the Chinese CBDC initiative has reportedly met a roadblock in Hong Kong which is part of the regions the digital Yuan pilot test is conducted. The e-CNY project has yet to pick up steam in Hong Kong following its launch, with less than a thousand Hong Kong residents embracing the initiative.

Given Hong Kong’s high use rate of credit and debit cards, the setback is a blow to China’s aim of expanding e-CNY use beyond the mainland. Nevertheless, the People Bank of China (PboC) has continued to push the CBDC project for years by freely issuing the digital Yuan to users to stimulate its use with little success to show for it.

So far, the PBoC revealed that the overall usage is less than 5% of the total CBDC developed for use. Meanwhile, the Chinese central bank hopes the e-CNY will be massively embraced in the ongoing cross-border pilot test in Macau and Hong Kong.

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