China to expand digital yuan testing program

The People’s Bank of China (PBoC) will expand pilot testing of the digital yuan (e-CNY) to a larger number of cities. The regulator noted the rise in transactions with the CBDC and the success of the experiment during the 2022 Winter Olympics.

China has been testing the digital yuan since late 2019. By the end of 2021, the volume of e-CNY transactions reached 87.57 billion yuan (~$13.68 billion), with 261 million unique digital wallets registered.

Trials were conducted in Shenzhen, Suzhou, Xiongan, Chengdu, Shanghai, Hainan, Changsha, Xi’an, Qingdao, Dalian and the site of the Winter Olympics. The cities mentioned will continue to use the instrument.

Now Tianjin, Chongqing, Guangzhou, Fuzhou, Xiamen and six cities in Zhejiang province, which host the Asian Games, will join the program.

The regulator said that in the next stage of e-CNY development it would work on protecting user privacy when using the instrument, as well as preventing its use for criminal purposes. In addition, the PBoC will conduct an “in-depth study” of the CBDC’s impact on China’s financial system.

In January 2022, Meituan allowed merchants among its partners to accept the digital yuan.