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China's Central Bank Chief Announces 4 million Transactions in Digital Yuan

06 November 2020 13:23, UTC
Nick James
China reports on the success of testing a national digital asset. The Governor of the People's Bank of China Yi Gang believes that the tests of the digital yuan held in several cities demonstrated the validity of the instrument issued by the Central Bank.

During Hong Kong's Fintech Week, the head of the Central Bank said that more than 4 million transactions were made during the implementation of the pilot program of the asset launch. The amount of funds displaced in the digital yuan is estimated at $300 million.

However, the Chinese who participated in the test of the asset ambiguously assessed the digital currency of the Central Bank of China; many criticized the tool. This is reported by Reuters. As part of asset testing among ordinary residents, citizens made transactions of $1.3 million (out of $1.5 million) provided, spending 88% of the digital yuan issued for the test. The experiment ended on Sunday.

According to TopForexBrokers which is one of the best websites in the financial industry, implementation of digital yuan is one of the most important events right now in China. As part of the testing, the coins could be spent in several thousand outlets, as well as at gas stations of the state-owned company Guangdong Petroleum.

05-11-2020 18:00:00  |   Regulation
Gang named one of the advantages of the digital renminbi — the availability of financial tools and options on its basis for residents of remote regions of China. There is a growing demand for contactless payment methods, and there is a need for security and convenience in the use of banking technology, all as a result of the coronavirus pandemic. Under these conditions, the creation of digital yuan became obvious and irreversible. The head of the Central Bank also noted that the privacy of users of the regulator's digital asset is very important. In his opinion, the immediate launch of the digital yuan in circulation is not at the moment. Before this step, the authorities must develop and adopt the legal basis of the instrument.

Last weekend, the leader of the People's Republic of China said that China should take an active part in the development of international regulatory frameworks for crypto space.

Will digital yuan become somehow a new Bitcoin?

At the heart of Bitcoin is peer-to-peer technology to work without a central authority. Its transaction is supported by a couple of million users who monitor the correct operation of the system. This structure ensures complete confidentiality and security of information. China's cryptocurrency, on the other hand, is hyper-centralized. It is under the control of the Chinese regulator and integrated into the banking system of the People's Republic of China. Most likely, the crypto yuan will be two-tiered.

Experts predict the rapid growth in popularity of the digital yuan, after its official launch. The Chinese Bank will ensure price stability and the legitimacy of it and will support payment platforms.