People’s Bank of China (PBOC) Governor Yi Gang said the pilot program for digital yuan has gone well, with over 2 billion yuan ($299 million) used in over 4 million transactions, Bloomberg reported.
The trial was rolled out in four cities earlier this year.
Yi, speaking at Hong Kong FinTech Week on Monday (Nov. 2), said that FinTech companies have some “key advantages” over traditional banks in terms of developing a customer base and curbing risk. He praised financial inclusion, with microloans and mobile payments bridging a gap for rural residents but said protecting peoples’ private information is still challenging.
And, Yi said the growth in contactless banking since the pandemic has made it challenging for central banks. He said they now have to balance customer safety with the convenience of using the bank’s services.
In August, PYMNTS reported that China’s testing of the digital yuan was focused on retail, specifically on small transactions and excluding much larger ones. There were rumors initially that the digital currency electronic payment (DCEP) had been used for a real estate transaction, but those rumors were quelled. Instead, the bank said the only priority at that time was testing DCEP to make sure it ran smoothly and that it could be distributed from the central bank to other institutions.
PYMNTS reported that the initial focus on retail could signal that the bank is scaling its operations in piecemeal fashion toward a full launch, concentrating on domestic transactions so as to launch sooner rather than later.
In October, PBOC made the decision to issue 10 million yuan ($1.5 million) worth of digital currency to 50,000 people chosen by a lottery in the country’s first trial run of its cashless payment system. The program saw almost 2 million applicants and the winners were chosen at random. The digital yuan they received was used between Oct. 12 and 18 at over 3,000 designated shops.