China Releases e-CNY as Central Bank Looks to Go Cashless

China is trying to release its new e-CNY digital currency to four cities: Tianjin, Chongqing, Hangzhou, and Guangzhou. The central bank is now giving out incentives for banks, local authorities, and even tech firms to adopt the new e-CNY.

People's Bank of China Meeting Pushes for the Support of the Digital Yuan

According to the story by SCMP, the People's Bank of China (PBOC) made the official decision in a meeting held on Mar. 31, as per a statement released just recently. This will be the PBOC's first move when it comes to supporting the digital yuan.

The Xiamen and Fuzhou provinces will cover the program. In addition, the experiment on China's e-CNY will include cash reward bonuses to consumers and merchants for the acceptance of e-CNY as a form of payment.

Central Bank's Aim to Help Banks, Local Governments, and Tech Firms Benefit

The experiment showed initial feasibility regarding the digital sovereign currency. However, additional research and exploration are still needed to improve security, potential impact, and compliance when it comes to the current banking system.

As per the central bank, policies should be designed in order to stimulate enthusiasm and creativity when it comes to banks, local governments, and tech firms when it comes to the digital yuan's development, proliferation, and promotion.

US Treasury Former Senior Advisor Says e-Yuan Could 'Skirt US Financial Sanctions'

The active roll-out of China's digital currency has been moving ahead of other banks, including the Bank of Japan and the US Federal Reserve, which the source said raised "suspicion as to the Chinese government's intent."

A US Treasury former senior adviser, Robert Green, recently published an article noting that the upcoming e-CNY could "skirt US financial sanctions." The central bank of China's released summary did not include any mentions of the digital currency cross-border. It will be focused mostly on the use of the digital yuan domestically.

e-CNY Gained a User Base of 261 Million Users At the End of 2021

The article by SCMP states that the e-CNY is a digital form of the country's fiat money that won't be easily convertible outside of the country. With that, the digital yuan experiments have taken place in Shenzhen, Beijing, Shanghai, Chengdu, Changsha, Xiong'an, Suzhou, Xi'an, Dalian, and Qingdao.

Central bank data shows that the e-CNY had a massive user base of 261 million users at the end of 2021, as per Yahoo Finance. This is about double the number of users that the digital yuan had back in October of last year.

There are already plans in Hong Kong to roll out a new pilot scheme for using the digital yuan in dining and shopping. This would make the special administration the very first offshore city that sees the use of e-CNY outside of the mainland, as per CEO of Hong Kong Monetary Authority (HKMA) Eddie Yue Wai-man.

This article is owned by Tech Times

Written by Urian B.