July 26, 2023

China’s central bank governor, Yi Gang, reported that transactions using the digital yuan reached an impressive 1.8 trillion yuan ($249.33 billion) by the end of June. This marked a significant surge from just over 100 billion yuan recorded in August of the previous year.

With this remarkable growth in digital yuan transactions, China solidifies its position as a global leader among countries actively developing their own central bank digital currencies (CBDCs). These CBDCs refer to digital tokens issued by central banks. However, despite China’s advancements, the adoption of CBDCs remains in its early stages. The digital yuan, known as e-CNY, has primarily found use in domestic retail payments.

During a lecture organized by the Monetary Authority of Singapore (MAS), Yi Gang, China’s central bank governor, revealed that China’s digital currency in circulation had reached 16.5 billion yuan as of the end of June. He also disclosed that the total number of e-CNY transactions had reached 950 million, and there were 120 million wallets opened for its use. However, Yi noted that the e-CNY in circulation accounted for only 0.16% of China’s M0 money supply (cash in circulation).

Despite this small balance, the high velocity of transactions makes it more efficient. Last year, Chinese state-owned banks participated in a cross-border transaction trial. Yi’s potential successor, Pan Gongsheng, was recently named PBOC party chief. When asked about the succession, Yi declined to comment directly, focusing on fulfilling his current duties.

Source: Reuters
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