1. Efforts to Promote Increased Adoption of Digital Yuan in Shanghai and Suzhou
The respective administrations of Shanghai and Suzhou, two of China’s most affluent regions, are intensifying efforts to boost usage of the country’s digital national currency, or CBDC, known as the e-CNY. Their initiatives aim to invigorate adoption and acceptance levels among citizens and businesses within these cities, as China continues to conduct tests and expand the use of its digital legal tender.
1.1 The Overall Current Status of e-CNY Adoption
The Peoples Bank of China (PBoC), the country’s central bank, recently reported that, so far, approximately $250 billion has been transacted within the country using the CBDC. However, despite such a sizable sum, the extent of adoption still only represents a minuscule part of China’s colossal economy.
1.2 Formal Discussions and Meetings on Digital Yuan Promotion
The Suzhou Municipal Bureau of Commerce organized a Special Digital Yuan Promotional Committee meeting, with eight major banks attending. The participants scrutinized the progress made by Suzhou-based organizations in e-CNY integration and held discussions on “plans for the next stage of digital yuan adoption”.
1.3 Strategies to Stimulate E-CNY Acceptance
- Increasing publicity: The participants agreed on the necessity to raise publicity levels. This includes implementing additional promotional activities and campaigns, and creating even more application scenarios for the e-CNY.
- Improvements to the whitelisting system: Enhancements for the whitelisting system of vendors who wish to commence the use of digital yuan were deemed essential. This could include shifting from concentrating solely on the retail sector towards focusing more on wholesale and B2B industries.
- Streamlining the whitelisting process: The need was also identified for companies to facilitate the whitelisting process, especially for businesses necessitating high-frequency and bulk payments.
- Better Organization and Coordination: The parties concluded that improved organization, coordination, and communication could help further the pilot project’s advancement.
2. External Support to Boost CBDC Adoption
China News reported that the National Development and Reform Commission (NDRC), which answers to the State Council, one of China’s most powerful government bodies, is also showing interest in assisting Shanghai and Suzhou in promoting e-CNY usage. The NDRC undertakes macroeconomic planning on a nationwide scale and recently published a new set of policies that “explicitly supports” Shanghai and Suzhou’s efforts to “jointly undertake digital yuan pilot projects”. The new NDRC policies include the creation of additional adoption scenarios in the cities, as well as interoperability resolutions.
Bank of Jiangsu staffers show citizens in Huai’an, China, how to use the e-CNY. (Source: Bank of Jiangsu)
3. Regional Banks Aim to Boost Adoption
Elsewhere in China, regional Chinese banks are also taking steps to improve acceptance. For example, the local branch of the Bank of Jiangsu, located in Huai’an, in Jiangsu Province, organized a series of digital yuan promotional events on August 16th. These included a “night market” and a fun run. Bank staff trained attendees on the usage of e-CNY and how to recognize financial fraud. Therefore, knowledge and awareness of digital currencies are being promoted at a regional and grassroots level as well.
Citizens in Huai’an, China, are invited to make transactions using China’s CBDC. (Source: Bank of Jiangsu)
In further developments, the city of Tianjin claimed it had processed $1.76 billion worth of digital yuan since becoming a part of the pilot zone in April 2022, indicating a growing adoption of the e-CNY across different regions of the country.
