China to Implement Massive Digital Yuan Rollout in Shanghai

Source : Photo by CARLOS DE SOUZA on Unsplash

The implementation of the digital yuan (e-CNY), China's central bank digital currency, will be carried out on a large scale in the Pudong area of Shanghai, China.

According to documents published by Xinhua on January 22, there are several innovations aimed at boosting the adoption of digital yuan in the region over the next five years.

The digital yuan will be involved in trade settlement, e-commerce payments, carbon trading, environmentally friendly energy trading, and more. There will also be standardization and expansion of digital yuan application scenarios in fiscal fund usage.

The document promises that by 2027, "Institutional breakthroughs will be achieved, [and] significant results will be attained in the development of a high-standard market system and a new high-level open economic system."
Based on the document, the Pudong New Area will be granted new authority to develop into an international hub that will support the country's economy.

Development of Digital Yuan

Source : Photo by Eric Prouzet on Unsplash

The People's Bank of China (PBC) document notes the development of China's digital currency, e-CNY, began with initial research and concept development between 2014 and 2016.

In 2017, the Digital Currency Institute was established, leading to the formulation of a top-level design for e-CNY.

Pilot programs began at the end of 2019 in several cities, including the location of the Beijing 2022 Winter Olympics. The project expanded rapidly, with significant achievements in July 2021 when the PBC released a whitepaper detailing the progress of e-CNY.

In January 2022, the e-CNY application became available to the public, marking a new phase in the accessibility of digital currency. As of December 31, 2021, e-CNY had a transaction volume of 230 million and was accepted by over 3.6 million merchants, indicating widespread adoption.

In 2023, e-CNY experienced further uptake with its implementation in 26 cities, and more than 5.6 million merchants engaged in the use of this digital currency.

In 2023, the currency was integrated into the salary payments of civil servants in the Jiangsu province. In September 2023, e-CNY was promoted at the China-ASEAN exhibition in Guangxi for bilateral trade.

Hong Kong also joined the initiative to promote e-CNY, where Bank of China Hong Kong facilitated transactions for mainland Chinese customers at over 200 retail locations, marking a significant step in the digital yuan's journey towards broader adoption and internationalization.

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