The future of transactions seems to be taking a whole new turn, particularly in China, where financial entities, local governmental bodies and businesses are gradually embracing the digital yuan, China’s Central Bank Digital Currency (CBDC), to revolutionize diverse sectors from gold recycling to land registry fee payment.
Evidencing this, initiatives like the one involving the Shenzhen branch of the People’s Bank of China (PBoC), Shanghai Gold Exchange, and local government of Shenzhen’s Futian District draws attention. They’ve collaborated with the Shenzhen branch of the China Construction Bank and gold trading firm Jinyafu, on a gold recycling project powered by the digital yuan.
Underline the growing prominence of gold recycling in China, the World Gold Council documented it as a significant supply source, contributing 20% of the domestic supply in 2018. Serving this burgeoning market, Jinyafu has reportedly developed the country’s first CBDC-enabled gold recycling platform that allows customers to receive their CBDC payments virtually immediately – a functionality facilitated simply by entering their mobile numbers or wallet ID numbers.
Parallel to this, there’s also an increased use of the digital yuan within the real estate realm, where institutions are coordinating to have their land registry deals powered by CBDC. A case in point is from the southeastern city of Fuqing in Fujian province. The city recently recorded the highest-ever land registry fee payment made in CBDC, processed through a China Merchants Bank digital yuan wallet worth almost $19 million.
Fuqing continues setting the pace with its CBDC-powered land registry adoption, with ambitions to accelerate the adoption of the digital yuan in various scenarios. The city aims to leverage the coin to catalyze “digital financial innovation” and ramp up the effectiveness of “economic services”. The marked shift away from conventional payment methods is also visible in their integration into other commonly used technologies, as seen with Chinese telecom companies unveiling their latest “Super SIM” cards equipped with new e-CNY features.
Apart from these specific use-cases, the broader potential and limitations of the digital yuan remain to be seen, the platform paving the way for the increasingly digitized financial landscape. All in all, the fusion of public and private sectors, banking and tech, under the umbrella of CBDC adoption paints a very different picture of what lies ahead for China’s, and potentially the global, economy.
Source: Cryptonews
