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China’s Digital Currency Used in Transactions Worth $10 Billion, 140 Million People Have Digital Yuan Wallets

China’s Digital Currency Used in Transactions Worth $10 Billion, 140 Million People Have Digital Yuan Wallets

China’s central bank digital currency (CBDC), the digital yuan, has been used in transactions worth nearly $10 billion, according to an official with the Chinese central bank, the People’s Bank of China (PBOC). In addition, the government digital wallet has been downloaded by about 140 million people.

Digital Yuan’s Adoption Rises, Nearly $10 Billion Transacted

Mu Changchun, the director-general of the digital currency institute of China’s central bank, the People’s Bank of China (PBOC), shared the adoption progress of the digital yuan at Hong Kong’s Fintech Week conference Wednesday.

He revealed that some 140 million people had downloaded the wallet for China’s central bank digital currency (CBDC), the eCNY, as of October. Furthermore, the digital yuan has been used in transactions totaling about 62 billion yuan ($9.7 billion), Reuters reported.

While China has been actively testing its digital yuan, the PBOC official said that there is no official launch date for the digital currency.

Mu added that so far 1.55 million merchants could accept payments using eCNY wallets, including utilities, catering services, transportation, retail, and government services.

A growing number of central banks worldwide are exploring launching their own CBDCs. According to the Atlantic Council’s CBDC tracker, 87 countries are now exploring a CBDC. Among them, seven have launched, 17 are being piloted, 15 are under development, and 39 are being researched.

In September, the head of the Bank of International Settlements (BIS) Innovation Hub, Benoît Cœuré, urged central banks to act on central bank digital currencies now to compete with initiatives in the private sector, including cryptocurrencies.

However, China says all cryptocurrency related transactions are illegal

China’s central bank said on Friday that all cryptocurrency-related transactions are illegal in the country and they must be banned, citing concerns around national security and “safety of people’s assets.” The world’s most populated nation also said that foreign exchanges are banned from providing services to users in the country.

In a joint statement, 10 Chinese government agencies vowed to work closely to maintain a “high pressure” crackdown on trading of cryptocurrencies in the nation. The People’s Bank of China separately ordered internet, financial and payment companies from facilitating cryptocurrency trading on their platforms.

The central bank said cryptocurrencies, including Bitcoin and Tether, cannot be circulated in the market as they are not fiat currency. The surge in usage of cryptocurrencies has disrupted “economic and financial order,” and prompted a proliferation of “money laundering, illegal fund-raising, fraud, pyramid schemes and other illegal and criminal activities,” it said.

The Chinese government will “resolutely clamp down on virtual currency speculation, and related financial activities and misbehaviour in order to safeguard people’s properties and maintain economic, financial and social order,” the People’s Bank of China said in a statement.

The move has already started to cause panic among some crypto traders, sending the price of bitcoin and several other currencies down. Bitcoin was down 5.5% at the time of publication.

China, home to some of the world’s largest crypto mining services, is also going after those businesses. The National Development and Reform Commission said it was launching a nationwide cleanup of cryptocurrency mining — a task it said was “imperative.”

This is not the first time China has declared a crackdown on cryptocurrency-related activities, but until now so many government agencies had not collaborated on such efforts.

Regulators in China have been weighing a ban on crypto mining for several years. But in recent quarters, several local firms have started to embrace crypto. Chinese app maker Meitu bought Bitcoin and Ether worth $40 million in March.