A new button for using e-CNY, digital RMB, can be found among the paying options pages of the self-service subway ticketing machines in Beijing from Aug 1. This is a new use scenario of the digital currency of China's central bank in the realm of transportation.
E-CNY is China's legal digital currency, and is a combination of digital currency and electronic payment tools by the People's Bank of China (PBOC). Simply put, the PBOC digital currency is the electronic version of the RMB. It is easy to understand the concept of digital currency when you think of digital currency as digitalized cash.
However, it’s different from other electronic payment tools. Although their payment function is similar, e-CNY has its own specific advantages, said Mu Changchun, director-general of the PBOC Digital Currency Research Institute.
Firstly, e-CNY is national legal tender and has the highest-rated security asset. Secondly, it has value characteristics, allowing it to transfer value without relying on a bank account, and be able to support offline transactions, making it a "payment-as-settlement" feature, said Mu.
Since the expansion of the e-CNY pilots, its white-listed users have reached 10 million.
At the end of 2019, e-CNY pilots and tests were launched in Shenzhen, Suzhou, Xiong'an, Chengdu and the Beijing Winter Olympic Stadium. By October 2020, six additional pilot test areas were added, namely Shanghai, Hainan, Changsha, Xi'an, Qingdao and Dalian. E-CNY were issued via red envelopes in the form of a "lottery" and the winners could spend the currency at designated merchants without any thresholds.
The pilot provinces and cities now cover different regions, such as the Yangtze River Delta, the Pearl River Delta, the Beijing-Tianjin-Hebei region and China's central, western, northeast and northwest regions, which is conducive when assessing the prospect of e-CNY application across different regions of China.
E-CNY pilot tests adhere to the principles of being prudent, secure and controllable, and focus upon small transactions by invited white-listed users. The payment scenarios cover various fields, such as bill payments, food and beverage services, transportation, shopping and consumption, and government services, said Ruan Jianhong, head of the PBOC's statistics and analysis department and PBOC's spokeswoman.
Since the previous phases of the pilot test, the scope of e-CNY pilot test has been expanded in an orderly manner, with the application scenarios having been enriched, the mode has continued to be innovative, and the system operation has been stable, said Ruan.
The Central Bank released the white paper of Progress of Research & Development of E-CNY in China on July 16, disclosing the research and development of e-CNY for the first time.
The white paper shows that, at present, China's e-CNY research and development trials have completed top-level design, function development and system debugging. As of June 30, e-CNY pilot scenarios have exceeded 1.32 million, taking into account both online and offline scenarios. Its white-listed users have exceeded 10 million, with 70.75 million of transactions amounting to 34.5 billion yuan.
Although there are currently many pilots of e-CNY around China, the digital RMB has not yet officially been issued.
Before its official launch, e-CNY still needs to test its theoretical reliability, system stability, risk controllability and many other aspects. The PBOC has also repeatedly stated that there is no timetable for the launch of digital RMB yet.
Nevertheless, let's look forward to using the convenient e-CNY in the near future.
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