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Peoples Bank of China reports significant growth in CBDC adoption

Peoples Bank of China reports significant growth in CBDC adoption
© Copyright Image: CryptoSlate

The Peoples Bank of China (PBOC) reported a significant growth in the adoption of its central bank digital currency (CBDC), the digital yuan, with 180 million individual wallets opened as of July 31, local media reported on Oct. 11.

The CBDC has been used to conduct transactions of over 7.3 trillion yuan ($1 trillion) across pilot regions. This rapid expansion showcases Chinas ambition to strengthen its financial system and promote the global influence of the renminbi through the digital economy.

Mu Changchun, Director of the Digital Currency Research Institute at the PBOC, outlined the strategic importance of the digital yuan, or e-CNY, in a recent statement, emphasizing its role in advancing Chinas status as a financial powerhouse.

Mu said that the e-CNYs growth aligns with President Xi Jinpings vision of a robust financial system that supports national development and international competitiveness.

Two-tier system

The e-CNY operates on a two-tier system, with the PBOC overseeing central management and commercial institutions handling distribution. The structure allows for flexibility and efficiency as the currency integrates both account-based and token-based models.

This enables a variety of payment methods, including offline transactions where internet access is limited. Mu emphasized that this system optimizes financial processes and reduces transaction costs, all while enhancing financial inclusion.

Since its introduction in 2014, the digital yuan has expanded its applications across multiple sectors. Mu highlighted its growing use in retail, healthcare, public services, and more, contributing to a more streamlined and secure monetary system.

The e-CNY also helps China reduce its dependence on traditional financial infrastructures, paving the way for more seamless integration into the global digital economy.

Cross-border reach

In addition to domestic advancements, China has actively pursued cross-border collaborations to enhance the international use of the digital yuan.

The PBOC has engaged with central banks in Thailand, the UAE, and Hong Kong, establishing multilateral digital currency bridges to improve cross-border payment efficiency.

These initiatives seek to address issues such as high costs and low transparency in international payments, positioning the digital yuan as a leader in global CBDC efforts.

Mu reaffirmed the PBOCs commitment to further innovation, with plans to expand the e-CNYs role beyond retail payments into broader financial services, including wholesale transactions and lending.

The post Peoples Bank of China reports significant growth in CBDC adoption appeared first on CryptoSlate.

Read more: https://cryptoslate.com/china-central-bank-reports-significant-growth-in-cbdc-adoption/

Text source: CryptoSlate

Disclaimer: Financial information and news are not financial advice, read the disclaimer.
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