The digital yuan, China’s central bank digital currency (CBDC), is making significant strides in the financial landscape. As reported by People’s Bank of China governor Yi Gang, the digital yuan’s transaction volume is nearing a substantial $250 billion.
However, it’s important to note that this figure only represents a small fraction, specifically 0.16%, of China’s total monetary supply.
Digital Yuan Transaction Volume in China Nears $250 Billion
Since its inception in January 2022, the digital yuan has been involved in approximately 950 million transactions. These transactions have been made from around 120 million wallets, leading to an average transaction amount of about $260.
Despite the population of China being 1.4 billion, the adoption of the digital yuan is still in its early stages, primarily being used for domestic retail payments.
Exploring Cross Border Applications of the Digital Yuan
In a bid to promote the cross-border applications of the digital yuan, the Bank of China Hong Kong has initiated another trial. This trial involves a cross-border payment scheme for its customers at select retail stores in Hong Kong.
This marks the third cross-border trial of the CBDC in Hong Kong, indicating a growing interest in exploring the international potential of the digital yuan.
The Future Trajectory of the Digital Yuan
The transaction volume of the digital yuan has seen a significant increase, with a growth of over 70% from the figure reported in August 2022. However, when compared to the value processed by some of the world’s largest public blockchains, there’s still a long way to go.
With the integration of smart contract functionality into the digital yuan, the CBDC’s use cases are set to expand, potentially leading to a further increase in transaction volume.
Leave a comment