“Xie is said to have expressed disappointment with the result of the digital yuan trial in select provinces and cities, noting that “the cumulative circulation of the digital currency in the two years of trial has been only ¥100 billion”. Adding that the usage has been “low and highly inactive”. Despite China being among the leaders in developing central bank digital currencies, Xie says that the digital yuan business had no synergistic effect and no commercial benefits in banks’ business.”

“More Chinese cities will be added to the nation’s digital yuan pilot – with a rollout edging closer to reality. Per the newspaper the Workers’ Daily, the city of Jinan, Shandong Province, will be added to the pilot area. Also joining the pilot will be Nanning and Fangchenggang in the Guangxi Zhuang Autonomous Region, as well as Yunnan Province’s Kunming. The Xishuangbanna Dai Autonomous Prefecture will also be added. The move sees the pilot move into somewhat unfamiliar technology. While the first batch of pilot cities comprised IT and financial powerhouses in the East of the country – the likes of Shanghai and Beijing – Yunnan’s economy is much more traditional. The province’s biggest industries include tobacco producers, agricultural firms, mining companies, and tourism operators.”

“The official wallet app of China’s digital currency has launched a red packet feature, a function made popular over the years by the country’s dominant payments app Alipay and WeChat Pay, in a fresh move to lure new users. The e-CNY app’s latest update, released over the weekend, allows users to send each other digital yuan-filled red packets – known as hongbao in mainland China. This comes just a month ahead of the Lunar New Year, when the Chinese traditionally give out red envelopes filled with cash to family and friends as a symbol of well wishes.”

“China’s digital Yuan project, a blockchain-based cryptocurrency for consumer and commercial finance, can no longer be considered a pilot. That’s the assessment by economic and cryptocurrency experts. Those experts have been monitoring efforts in China and other countries developing and piloting central bank digital currencies (CBDCs) with the aim of establishing a blockchain-based virtual cash that is cheaper to use and faster to exchange, both at home and across international borders. To date, the People’s Bank of China has distributed the digital yuan, called e-CNY, to 15 of China’s 23 provinces, and it has been used in more than 360 million transactions totaling north of 100 billion yuan, or $13.9 billion.”

“China’s sovereign digital currency has been embedded into Alipay, the popular digital wallet run by Ant Group, to facilitate “express payments” on the Taobao and Tmall e-commerce sites operated by Alibaba Group Holding, according to Li Chen, Ant’s chief compliance officer. The digital currency, known as e-CNY, is only available for users in about two dozen cities in China as part of a trial programme, as the central bank struggles to convince consumers to use it. After enabling the feature via the official e-CNY app, users can pay for orders on Taobao, Tmall and other Alibaba Group platforms like food delivery site Ele.me and grocery store Freshippo, with Alipay using the digital yuan.”

“China’s CBDC plans have long been in the pipeline. In 2016 China’s central bank laid out a blueprint for the country’s first Central Bank Digital Currency. In addition, the government urged banks and financial institutions to form alliances with other industries to accelerate the development of an industry-wide digital currency platform. This directive was intended to increase efficiency in the financial industry and make it more competitive against private sector initiatives. People who are interested need to know the impact of the digital Yuan on the Chinese market. Since then, several institutions have been involved in creating a standardized CBDC platform. As a result, the project is well underway, with over 120 projects completed by 2022. The country’s largest banks are the China Development Bank and the Industrial and Commercial Bank of China. The CBDC’s long-term vision encompasses its use as a reserve currency and national electronic payment system — which would significantly improve China’s international trade capabilities. As the world’s second-largest economy by nominal GDP, China is looking to increase its influence on the international stage further. Coupled with its large domestic economy, an influx of FX reserves and a national payment instrument would give China the financial power to compete with economic superpowers like the United States and Japan.”