While giving a speech at the Sibos 2020 Conference Fan Yifei, Vice Governor of the People’s Bank of China, explained in detail about the advancement of the digital yuan venture.
As per information provided by Yifei, almost 1.10 billion RMB or roughly $162 million Digital yuan, officially referred to as Digital Currency for Electronic Payments (DCEP), has been handled in over 3 million transactions so far.
Rolled out in April as the initial trial stage in the creation of the central bank digital currency (CBDC), the Vice Governor claimed that the digital yuan is the widely utilized asset of its type in a commercial framework.
As per official numbers, 113,000 people and 8,800 enterprises have utilized digital yuan for transactions in the Suzhou, Shenzhen and Xiong’an regions.
The transactions have paved way for realizing 6,700 use cases, including crediting of incentives given by Chinese government to healthcare employees, easiness in settling domestic bills and paying transport fares, among others. The vice-Governor of the People’s Bank of China stated that the digital yuan facilitates two major functions:
“To protect fiat currency from crypto assets and safeguard monetary sovereignty, it is necessary for the central banks to digitize bank notes through new technologies.”
Dovey Wan, founding partner of Primitive Crypto, stated that the head office incharge for digital yuan trial was shifted to Shenzhen Province.
As a result, 12.50 million people in Shenzhen will be awarded $1.50 million in their digital wallets and the money can be spent in more than 3,000 shops who are participating in the program.
Wan stated that a transformation to the digital yuan will be comparatively simpler for the residents in the country as people have been using alternative forms of cash already.
Wan trusts the roll out of digital yuan will be regarded as a transition to a different app for handling money. Nevertheless, she cautioned that digital yuan will hand over additional powers to the Chinese government:
“Rarely people will realize the significance of how elastic the future will be when it comes to monetary expansion and subtraction. In the future, targeted stimulus policy, helicopter money, brrrrrr in a much more granular level, an easy seizure of your personal wealth (for fair causes like anti-corruption, or can be exploited for corruption itself..) can all happen with a few lines of codes.”
With the launch of digital Yuan, Wan opined that having “your own keys” to Bitcoin will be the only solution to stay away from government control. Nevertheless, the creation of digital yuan could have a bullish effect on Bitcoin.
In spite of its unfriendly stance towards cryptos, China is perceived to be indirectly fostering the adoption of Bitcoin, Ethereum, and other major altcoins as one among several initiatives in the roll out plan for digital yuan, as per a survey by analyst Cole Garner:
— Cole Garner (@ColeGarnerBTC) October 5, 2020
7/ The Chinese government seems to want to ignite the bull market. https://t.co/SFKW7r7yFW
— Cole Garner (@ColeGarnerBTC) October 5, 2020
On that basis, Bitcoin’s fundamentals stay robust, trading at $11,490, reflecting a gain of 10% past week. Currently, the Chinese stance seems to support Bitcoin.
However, there is no cordial relationship between crypto market and China’s communist party.
As the image below indicates, Bitcoin miners continue to retain their rewards in expectation of positive announcements by China’s President Xi Jinping latter today.
Currently, the Chinese government intends to adopt digital yuan before 2022 when Winter Olympic is scheduled to happen in Beijing.
