Until today, over 300,000 Chinese merchants are accepting digital Yuan, the official Chinese CBDC. This comes just two years after the central bank in China released the CBDC version of the Yuan. The exponential growth of digital Yuan users is frightening, crypto enthusiasts believe. For those who don’t know, CBDC stands for Central Bank Digital Currency. So, a CBDC is a type of digital currency whose value is pegged to a real-world currency. But why is the crypto community so concerned about the adoption rate of such a currency? Well, because CBDCs are something that heavily promotes centralization. As they are issued by central banks, the amount of self-governance that CBDCs offer is considered to be “close to zero.”
Digital Yuan is in the pilot phase of the process. Initially, the Yuan CBDC is currently being used in Changsha, a city of 8 million people. Authorities claim that over 53.25 million digital Yuan transactions have been processed to date. The pilot is being tested in Shanghai, Hainan, Xi’an, Qingdao, and Dalian as well. Additionally, Hong Kong and Macau are working with Beijing central bank to test “cross-border” functionality and effectiveness.
Digital Yuan User Base Grows Exponentially
Changsha is one of the top areas for the accumulation of wallets, business transactions, and monthly active digital wallets, according to the People’s Bank of China (PBoC). During the Lunar New Year celebrations, the PBoC and its partners carried out campaigns to increase adoption by giving away tokens in Hangzhou and Beijing. In Tianjin, China Construction Bank offered customers discounts of up to 50% when they use digital yuan to pay at movie theaters, restaurants, or shops. So, the government of China is constantly working towards the mass adoption of the Digital Yuan. This also comes as Bitcoin and cryptocurrencies are heavily restricted in China.