PBoC Shares “Positive Progress” of CBDC Pilot Programmes
A deputy governor at the People’s Bank of China (PBoC) has hinted at what he describes as “positive progress” for the pilot programmes rolled out in batches for China’s Central Bank Digital Currency (CBDC) over the past year.
Fan Yifei disclosed at the ongoing Sibos 2020 conference that the Chinese digital currency, known as Digital Currency Electronic Payment (DC/EP), has been used for more than CNY1.1 bln (or $162 mln) worth of 3.13 million transactions processed as part of the continuing pilot phase with more than 113,300 personal digital wallets and about 8,800 corporate digital wallets opened in the process.
Sibos is a top global banking and financial conference organised by SWIFT. The 4-day digital thought leadership event which started on October 5 has a line-up of sessions including one on ‘Emerging technologies shaping the future of financial services’ which has panel members like the Managing Director & Venture Investing Lead at Citi Ventures, Luis Valdich and the Vice-Chair and Managing Partner, Financial Services at Deloitte, Rob Galaski.
Fan noted in his recorded speech for the conference in Chinese that more than 6,700 use cases have been implemented as of late August for transactions ranging from bill payments and transport to government services and that the PBoC regards digital yuan “as an important financial infrastructure for the future.”
Other uses of the currency according to him include for multiple payment methods such as bar code, facial recognition and tap-and-go transactions as well as its use as e-yuan red packets together with the Shenzhen government to reward about 5,000 medical and health care workers involved in the treatment of Covid-19 which they can use at designated merchants in Luohu, a Chinese county shopping hub.
The success of the DC/EP could be a way to eliminate the need for both physical cash and online payment services like PayPal as China challenges the US for global dominance. Konrad Adenauer Stiftung Senior Project Manager Alexander Badenheim adds that its roll out – especially at this time when there are talks of decoupling between the US and China – will give China an edge over other countries to potentially become a technological pathbreaker in the transition to a digital currency as more countries adopt the technology. China can even “create its own international payment architecture, something comparable to SWIFT” that would be “more centered on digital currencies and dominated not by the US dollar, but by the Chinese digital yuan.”