While China has maintained a rather strict approach against the growth of the crypto sector, the country is harnessing the power of blockchain to strenghten its economy. The country’s national CBDC, named e-CNY, is now proceeding to be tested in densely populated regions of the country, including the most populous Guangdong province. Jiangsu, Hebei, and Sichuan are other regions where the government of China will now be putting its CBDC to trials.
A CBDC or a Central Bank Digital Currency is like a cryptocurrency, but one that is administered by the central bank as well the government. Built on blockchain, CBDCs are capable of facilitating instant payments, nationally as well as cross-border. China’s CBDC is also known as the digital Yuan.
Fan Yifei, the deputy governor of the People’s Bank of China (PBOC) revealed this e-CNY trial expansion plan at a financial forum in Suzhou city in Jiangsu, as per a report by the South China Morning Post.
China’s central bank has been working on its CBDC for the last two years now.
Between 2020 and 2022, China launched its e-CNY app to facilitate payments through the CBDC. As of April 2022, people in 23 cities across China, including Shanghai, Beijing, and Shenzhen, were enabled to pay for goods and services with the e-CNY, China-Briefing had said at the time.
Cash rewards were offered to Chinese nationals who adopted and used the digital Yuan. While many merchants have opened payments in e-CNY, the digital currency is also being tested to function for loan repayments as well as tax payments.
China’s roll-out of its digital currency has surpassed the efforts of other major central banks like the US Federal Reserve and the Bank of Japan.
Presently, China’s neighbouring nations India and Russia are also working to launch their respective CBDCs.
Nigeria has emerged as one of the first nations to develop and launch a digital currency.
Launched as Africa’s first ever CBDC in October last year, the eNaira is now getting new features, intended to onboard unbanked citizens of Nigeria onto the nation’s existing financial system. The Nigerian government is targeting to get over eight million people to adopt eNaira as a payment method in the coming months.