The pilot program on the digital yuan rollout across four cities – Shenzhen, Suzhou, Xiong’an, and Chengdu has been smooth, said Yi Gang, governor of China’s central bank People’s Bank of China.
Over 4 million transactions, totaling more than 2 billion yuan ($299 million) in the digital currency so far, have been made, he said.
As per the figures, the digital yuan pilot expanded 21% and 82% from the 3.3 million transactions valued at 1.1 billion yuan, respectively recorded in late August, according to South China Morning Post.
The PBOC pilot discovered 12,000 use cases for DCEP, up 80% from 6,700 ways as of late August. Yi said,
“So far, the experiment and pilot program have been (going) fairly smoothly.”
Legal Framework Needs Completion
The comments were made during the Hong Kong Fintech Week conference on Monday, where Yi was speaking on a virtual panel with Agustin Carstens, head of the Bank for International Settlements, and Klaas Knot, president of the Dutch central bank.
Despite the digital yuan usage expanding rapidly across Chinese cities, Yi said they are in the early stages of developing a central bank digital currency. On the launch of digital yuan, Yi said China first needs to complete,
“A fairly complicated, and complete legal framework and regulations (for digital yuan) that enhances its transparency.”
With DCEP, the world’s second-largest economy is accelerating towards a cashless society. The country’s digital payments transaction volume has actually been expected to surge to 412 trillion yuan by 2025, up from 201 trillion yuan last year.
A Global Framework for CBDC
As we reported, the central bank published a draft law last week aiming to provide the DCEP a legal status.
Yi didn’t say anything about that on Monday but said the PBOC had completed the architectural design of the (CBDC). He further reiterated that the pilots would also run at the Winter Olympics in 2022, for which QR codes, tap-and-go transactions, and other features will be available.
During the panel, which was moderated by the Hong Kong Monetary Authority’s chief executive Eddie Yue, Yi said the PBOC would also collaborate with other central banks to establish a legal framework for CBDs globally. Yi said,
“I would like to cooperate with the Bank of International Settlements, the Financial Stability Board and international central bankers to discuss a legal framework, [fostering] transparency and how to safeguard [the development] of central bank digital currencies.”