Digital Yuan Usage in China Leaps 1,800% in Past 12 Months

The digital yuan is gaining traction in China with the number of wallets growing exponentially to 261 million.

Reports say the use of the digital yuan central bank digital currency (CBDC) increased by 1,800% in the last year, especially during the recent 618 festival, which is similar to Black Friday.

The People’s Bank of China said that transaction volumes using the digital yuan reached $13 billion by the end of 2021.

China has been ramping up its efforts to promote the use of the digital yuan using several lotteries to expand usage and test the currency. The country has sent assets via a red envelope lottery, and over 20 cities are now involved in the pilot program. 

China hopes to launch digital yuan soon

The government is hoping to officially launch the digital yuan as soon as possible, something which other governments are taking note of.

The district of Chongqing was the most recent to launch a program for the digital yuan. It will see a tax payment pilot program for the CBDC, just one of many trials being conducted in the country.

The wallet is available on both Android and iOS, and most Chinese adults have a favorable opinion of the e-CNY app. 72% have said that they use the app for online shopping, while 67% said they use it for paying for public services such as transportation.

Citizens are seeing benefits in the app, and many cite government oversight and streamlined transfers as the biggest advantages. They also believe that it will help China’s economy grow and become a global leader.

The progress of China and the growth of the crypto market has spurred other countries to consider CBDCs. Over 90% of central banks are now looking into CBDCs, with 60% of them working on proofs-of-concept.

Some are using existing solutions, for example, Norway’s central bank is choosing an Ethereum L2 project for its CBDC test. While others prefer to model their CBDC after the likes of Sweden and Japan.