Given the benefit they can bring to Central Banks worldwide, CBDCs seem inevitable. China is ahead of the curve with its Digital Yuan project now running across 23 cities. Meanwhile, Europe is still debating over its CBDC project the Digital Euro, especially on its potential effects on citizens’ privacy.
Centralized Digital Yuan Expands to 11 More Cities in China
China’s Central Bank, the People’s Bank of China, announced on Saturday its expansion of the Digital Yuan pilot program to 11 more cities from the previous 12.
The latest lineup of cities involved with China’s central bank digital currency (CBDC) trial is the following: Chongqing, Fuzhou, Guangzhou, Tianjin, and Xiamen. The other six cities are in the eastern Zhejiang province, which holds 57.3 million people. Overall, since the CBDC trials started in Shenzhen in October 2020, people used it to transact $11.24 billion worth of goods and services by the end of 2021.
Moreover, the Digital Yuan (e-CNY) helped Chinese police catch scammers last November. In a classic case of a call-in scam to provide a service for an up-front payment, they lifted off 200,000 Yuan ($32,000). However, because they used an e-CNY wallet to attempt to launder the ill-gotten gains, they were swiftly caught.
Although having tackled criminals, that case demonstrated what many have been warning about. Is the CBDC design inherently such to serve as a platform for programmable surveillance money?
Could Digital Euro Follow Digital Yuan’s Approach to Privacy?
After the US Dollar, the Euro is the world’s second-largest reserve currency, which may be eroded in the coming years. Although the Eurozone represents a market size of 343 million people, that market is highly dependent on Russian energy imports. In turn, when the EU nations imposed sanctions on Russia, they effectively imposed them on themselves too.
