According to a report from Ledger Insights, People’s Bank of China (PBOC) Deputy Governor Fan Yi Fei revealed some data and insights into the ongoing trials of the Digital Yuan at the SIBOS 2020 financial services summit. The event has gone virtual this year due to the ongoing COVID-19 pandemic.
3 millions transactions processes
During a panel discussion the PBOC deputy governor revealed that more than three million transactions have taken place through the Digital Yuan’s platform, equating to around 1.1bln Renminbi ($160mln) from the beginning of testing earlier this year to August 2020.
Over 113000 personal digital wallets have been set up to facilitate the testing of the pilot program while nearly 9000 corporate wallets were created as well.
According to Fan the trial process is still ongoing but the development of some key functionalities have been wrapped up already:
“PBC regards digital RMB as an important financial infrastructure for the future. It has actively been carrying out research and development and pilot projects under the promise of two-tier operation, M0 substitution and controllable anonymity. The architecture, standard formulation, research & development of functionality, joint debugging and testing of e-CNY system have been completed.”
As previously reported by The Daily Chain, the testing of the Digital Yuan had been extended to a number of major metropolitan areas in China involving a number of major banks and financial institutions as well as various retail companies.
Fan noted that Shenzhen, Suzhou, Xiong’an and Chengdu had been involved in ‘internal closed pilots’ while confirming that testing will also be conducted during the upcoming Winter Olympics in 2021.
To date over 6700 use cases have been tried for the Digital Yuan. This includes its use for paying general bulls, catering services, transport services, general retail payments as well as government services.
Protecting sovereignty of fiat currencies
Another major talking point during the discussion was the potential for CBDCs to overhaul and improve existing cross border payment mechanics. The emergence and success of various cryptocurrencies, from Bitcoin to stablecoins like Tether (USDT) have offered novel means of making payments across borders.
Fan said that the creation of CBDCs will tap into the technology and capabilities of cryptocurrencies while providing governments and financial institutions some semblance of control in a steadily changing environment.
“To protect fiat currency from these crypto-assets and safeguard monetary sovereignty, it is necessary for the central banks to digitize bank notes through new technologies,” Fan said.
The technology also promises to spill over into the broader financial sector and Fan highlighted the hopes that various CBDCs will be able to work in tandem with each other to improve financial services and payment methods.
“In cross-border payments, we could achieve interoperability and address the trilemma (low costs, low risks, high efficiencies) by using digital fiat currency, collaborating with private sectors and adapting to long-term technology evolution continuously and establish a fiat digital currency alliance that observes regulations across jurisdictions and complies with international standards, for instance PFMI (Principles for Financial Market Infrastructure).”