It may not have been introduced to the public, but China’s digital currency is seeing benefits in different sectors of the industry, starting with construction. Three construction project payments were successfully made through China’s digital fiat currency, or the e-CNY, in the Eastern Chinese city of Suzhou. This was confirmed by the region’s local Digital Finance Department.
The digital currency is still in its pilot stage. Though it was made available during the 2022 Winter Olympics, Beijing has not yet fully implemented the use of its digital currency. As such, this marks the first time that digital yuan has been used for project payment in such fields as real estate and urban landscaping. This was confirmed by the Digital Finance Development Bureau of Suzhou High-Speed Rail New Town, one of the country’s current digital yuan pilot regions.
While the payments were not massive, it shows how powerful a digital currency is. As per the record, the total transaction reached 554,950 yuan (about $87,183). It was completed through the digital yuan wallets of the two Chinese banks in a matter of seconds.
Such conveniences have certainly caught the attention of the businesses that have used the e-CNY. As the general manager of the construction company detailed, the transfer was faster, safer and definitely more convenient.
More than 40 digital yuan pilot scenarios have been developed in Suzhou High-Speed Rail New Town. It has helped plenty of businesses in the area. The changes have been felt in a host of fields that includes:
- Electricity bill payment
- Subway ticket purchase
- Hotel services
- Canteen services
This is as reported by Zhou Xilang, the Deputy Director of the Digital Finance Development Bureau of the new town.
China’s digital yuan transactions hit nearly 87.57 billion yuan (USD 13.76 billion) at the end of 2021, as the country ramped up the research and pilot use of the central bank’s digital currency. The nation’s efforts in developing its central bank digital currency started in 2014 when it first conducted relevant studies. This was followed by the bank’s moves to engage in research and development cooperation with commercial banks and internet companies in 2017.
Digital currencies are part of the promise of digital transformation. The advantages can be truly overwhelming. First, there is speed. With a digital coin, seamless transactions would put any physical money at a serious disadvantage. Plus, there’s the minimal transaction cost as a government need not mint money.
However, a digital currency is not as easy as it sounds. Fiat electronic money such as the e-CNY need to be studied in-depth. Indeed, while the pros are many, there is a slew of cons that would need to be looked into. Chief of which is that they could be susceptible to hacking.
Cryptocurrencies differ from Central Bank Digital Currency (CBDC) as they’re not issued by any government. In short, crypto is not fiat money. A CBDC can certainly boost the economy. For instance, it could foster e-commerce. That should be timely with Chinese cities stepping up their online trade. The flow of goods can be hastened.
China’s digital transformation has been moving in great strides. The recently-concluded 2022 Winter Games in Beijing revealed that. Still, the Asian country has challenges to face ahead in its pursuit of Industry 4.0, one reason why it held off a planned banning of personal QR codes recently, as reported on OpenGov Asia.