Chinese eYuan / eCNY struggling for volumes
As
per newspaper reports, the transaction volumes of the Digital Yuan are not very
encouraging.
China has
been one of the first major economies to push forward the use of CBDC.
China
first started pilot testing of e-CNY for selected regions and also made it
available for use to foreign athletes at the Beijing 2022 Winter Olympics in
February 2022.
Multiple
Chinese city governments have given away millions worth of e-CNY to try to
promote consumption around the holiday season.
Chinese
cities launched digital yuan activities worth over 180 million yuan ($26.6
million) to promote consumption during the Spring Festival holidays, including
subsidies, consumption coupons and other programs, according to media reports
on Sunday.
Digital
yuan or e-CNY, a component of China's currency, has been developing rapidly in
recent years.
During
the first Spring Festival holidays after China optimized its COVID-19
prevention measures, many local governments handed out coupons in the form of
digital yuan to boost consumption.
For
instance, Jinan in East China's Shandong Province and Lianyungang in East
China's Jiangsu Province issued digital yuan coupons during the holidays.
Some
local governments also used digital yuan to subsidize businesses to boost
recovery, such as Shenzhen in South China's Guangdong Province, which handed
out 100 million yuan to subsidize the catering industry in form of digital
yuan.
Nearly
200 digital yuan activities were launched during the Spring Festival across
China, and the activities were worth more than 180-million-yuan, domestic news
site thepaper.cn reported.
The last
few months has seen the government enact other targets and features to boost
the usage of the CBDC.
On Feb.
1, senior ruling party officials in the city of Suzhous set a tentative key
performance indicator for the end of 2023 of having 2 trillion-yuan ($300
billion) worth of e-CNY transactions in the city.
The
target is ambitious considering cumulative e-CNY transactions only crossed 100
billion yuan ($14 billion) in October, two years after the CBDC’s launch.
In the
latest report mentioning the amount of currency in circulation, the People’s
Bank of China, or PBoC has included the country’s central bank digital currency
(e-CNY). As per the financial statistics report for the year 2022, the PBoC
said that there was a total of 13.61 billion digital yuan — worth roughly $2
billion.
Quote
Starting from December 2022,
e-CNY in circulation has been included in the amount of currency in circulation
(M0). At end-December, e-CNY in circulation stood at RMB13.61 billion.
UnQuote
The
circulation of the central bank’s digital currency has grown by 15.3 percent
during the month of December 2022. On the other hand, China’s broad money
supply for China stands at 266.43 trillion yuan.
The PBoC
further added that the Digital Yuan hasn’t caused much notable changes to its
growth rates. The 13.61 billion e-CNY in circulation represents only 0.13
percent of the 10.47 trillion yuan in circulation at the end of 2022.
The
Chinese Government – both central and local are taking multiple initiatives to
boost eCNY volumes.
The
initiatives have yet to show positive results.
Disclaimer: These are my personal views only. The bottom line is Safe ePayments. Nothing More – Nothing Less.
I am solely responsible for the
errors if any.
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original holder only.
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