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Digital Yuan Rising to Fame
China's central bank digital currency (CBDC), the digital yuan, has gained impressive traction with its transaction value reaching nearly $250 billion in just 18 months since its pilot project took off, as per a statement by the central bank governor.
On July 19, Yi Gang, the governor of the People’s Bank of China (PBOC), revealed at a conference hosted in Singapore that transactions in the digital yuan totaled 1.8 trillion yuan by the end of June.
Remarkable Transaction Statistics
Astonishingly, since the rollout of digital yuan in January 2022, almost 950 million transactions were recorded from approximately 120 million electronic wallets. This resulted in an average transaction size equating to roughly $260.
Yi mentioned that nearly 16.5 billion digital yuan, equivalent to around $2.3 billion, was in circulation at the end of June, which composes a mere 0.16% of China's total money supply as per a recent report by Reuters on July 19.
Adoption and Usage of Digital Yuan
Compared to China's population of 1.4 billion people, the digital yuan has seen a limited adoption, primarily for local retail payments, with several trials taking place in Hong Kong.
The Bank of China has started another trial for cross-border payment using digital yuan in select Hong Kong retail outlets, according to South China Morning Post’s July 18 report.
The aim of this trial program is to boost the cross-border applications of the digital yuan and represents the third cross-border trial of the CBDC in Hong Kong.
Expanding Use of Digital Currency
The central bank integrated smart contract functionality into the digital yuan in January to extend its range of applications. The transactional value of the digital yuan, now sitting at $250 billion, boasts a staggering 70% hike from the figure reported in August 2022.
Despite this impressive surge, the value still falls significantly short of the volume of transactions processed by some of the world's most prominent public blockchains, with Bitcoin ringing in $8.2 trillion in 2022 according to several reports.
