In a recent announcement, People’s Bank of China (PBOC) governor, Yi Gang, has confirmed that the total volume of transactions made with China’s digital yuan has reached nearly $250 billion. This impressive milestone was achieved within a span of just one-and-a-half years since the start of the pilot project.
1.8 Trillion Yuan Transactions in Just 18 Months
Yi Gang, during a conference held in Singapore on July 19, disclosed that the Central Bank Digital Currency (CBDC) transacted a total of 1.8 trillion yuan by the end of June 2023. According to Yi, approximately 950 million transactions have been executed from around 120 million wallets since the digital yuan’s official launch in January 2022, leading to an average transaction size of about $260.
Current Circulation: $2.3 Billion Digital Yuan
The PBOC Governor also shared that as of the end of June, there was about $2.3 billion, or 16.5 billion digital yuan, in circulation. This amount equates to just 0.16% of China’s total monetary supply, as per the July 19 Reuters report.
Adoption Still Minimal, Majorly Used for Domestic Retail Payments
Despite the impressive transaction volume, the adoption of the digital yuan remains low when considering China’s population of 1.4 billion. So far, the digital currency has been primarily used for domestic retail payments, with a few notable trials conducted in Hong Kong.
Hong Kong Trials
On July 18, the South China Morning Post reported that Bank of China Hong Kong started testing another cross-border payment scheme for Bank of China customers at select retail stores in Hong Kong. The move was part of efforts to promote the digital yuan’s cross-border applications and marked the third cross-border trial of the CBDC in Hong Kong.
The Digital Yuan’s Use Cases Continue to Expand
Despite being a relatively new player in the digital currency space, the digital yuan has seen a 70% increase in transaction volume from August 2022 to now. The PBOC has been actively working to expand the use cases of the digital yuan. Earlier this year, it integrated smart contract functionality into the digital yuan, allowing it to facilitate a broader range of financial operations.
Comparison to Major Public Blockchains
While the digital yuan’s transaction volume is impressive, it still lags behind the transaction volumes of some of the world’s largest public blockchains. For instance, Bitcoin, the world’s leading cryptocurrency, processed a massive $8.2 trillion in transactions in 2022 alone, according to various reports.
Regardless, the continuous growth in the digital yuan’s transaction volume reflects China’s ongoing push towards digital currency adoption and its ambitions to maintain a leadership position in the global digital economy.