The Chinese CBDC app reaches 180 million wallets, processing ¥7.3 trillion in transactions in the first half of 2024.
According to reports from the local news outlet Finance.Sina, the digital yuan, the digital currency developed by the People’s Bank of China (PBOC), has seen a significant expansion in adoption since its introduction. By mid-2024, over 180 million individual wallets had been activated for its use, with transactions exceeding 7.3 trillion yuan (equivalent to about $1,000 billion).
Operational structure and objectives
The digital yuan system, also known as e-CNY, is based on a two-tier model. The PBOC maintains central control of the currency, while allowing commercial banks to handle distribution. This model aims to improve access to financial services for the population, reducing costs of transactions, providing new means of payment, and offering the ability to conduct offline operations.
Mu Changchun, director of the PBOC’s Digital Currency Research Institute, emphasized the role of the digital yuan in strengthening the stability of China’s financial system and supporting the country’s economic development trajectory. A crucial aspect of the digital yuan is its potential expansion into international exchanges, positioning itself as a main alternative to the US dollar.
Sectors involved and applications
Since its conception in 2014, the use of the digital yuan has increased in multiple sectors. Among the areas benefiting are retail, healthcare, and public services, which are experiencing the advantages of a more efficient and interoperable financial system that reduces dependence on traditional banking structures.
Internationally, China has established collaborations with various central banks, including those of Thailand, the United Arab Emirates, and Hong Kong, with the aim of improving cross-border payments based on the digital yuan.
The People’s Bank of China has expressed its intention to further expand the applications of the digital yuan, involving not only the retail sector but also wholesale payments and lending services.
