China Expands Digital Yuan Pilot Program: Get Ready for CBDC Adoption
31. January 2023
• China’s Central Bank (PBOC) announced the expansion of its central bank digital currency (CBDC), the digital yuan, to 17 more provinces.
• The PBOC is introducing two core features to enhance the use cases of the digital yuan—offline payments and smart contract capabilities.
• To boost adoption, China is offering wealth management products that accept digital yuan payments in pilot provinces.
Expansion of Digital Yuan
The People’s Bank of China (PBOC) recently announced the expansion of its central bank digital currency (CBDC), the digital yuan, to 17 more provinces across China. This move is part of a pilot program that focuses on launching a system allowing consumers to “scan with one code.”
Alongside this expansion, the PBOC is also looking to improve the use cases of the digital yuan by introducing two core features—offline payments and smart contract capabilities. The offline payments feature will allow users to make payments without connecting to the internet via Near-field Communication (NFC). Meanwhile, through smart contract capabilities, users can win a daily prize of $1,312 that is divided among winners.
To increase adoption right from the start, China has announced plans to offer wealth management products that accept digital yuan payments in pilot provinces. Major investment banks such as China Galaxy Securities are providing these services for only selected customers.
Progress So Far
Over the past year, PBOC has been expanding establishment of CBDC and carrying out multiple innovative applications for it such as interconnecting it with traditional electronic payment tools and enabling transactions without increasing costs as much as possible.
China’s efforts towards establishing a strong foundation for its central bank digital currency have been remarkable so far, with promising features being introduced alongside its expansion across many more provinces in order to maximize adoption right from day one