During the last decade, China’s constant introduction of technological innovations in the financial services sector has been the key driver for placing the country at the forefront of fintech growth and for making its domestic market the world’s largest in this business segment.
Recent initiatives taken by the People’s Bank of China (PBOC) to develop a central bank digital currency (CBDC) that could help the country to become the first major economy to put into circulation a centralized virtual form of a fiat currency have become one of the most debated talking points in political summits and corporate board meetings.
The reason must be attributed to the role that CBDC is expected to play in the future as a gamechanger for the global currency system in terms of a supplement of paper currency, a competitor of other cryptocurrencies on the market, accelerator of financial inclusion and promoter of more targeted monetary policies. Therefore, it is not surprising that almost every piece of financial news coming out of China these days is carefully monitored and analyzed overseas by government officials and financial executives.
On June 18, Xinhua Finance reported that two of the largest state-owned banks, the Industrial and Commercial Bank of China (ICBC) and the Agricultural Bank of China (ABC), have begun offering cash exchange services for the digital renminbi in Beijing.
The feature, initially available only in China’s capital, allows customers to easily convert China’s digital yuan to fiat currency and vice versa at dedicated ATM machines that are marked with the digital RMB logo. The whole process requires users to set up a digital wallet, verify their identity, scan a QR code and authorize the transaction, which takes only a couple of minutes.