The highly anticipated Beijing Winter Olympics have come and gone, and the soft launch of China’s CBDC, the e-CNY, had a very frosty reception at the event marked by international boycotts. That being said, it seems that China is just getting started.
Keep your Chin-a up
A report by the South China Morning Post reported that the central bank’s Digital Currency Research Institute was racing to hire blockchain experts, engineers, developers, and digital architects at exorbitant rates in order to widen the reach of the e-CNY trial.
While mining Bitcoin and trading NFTs might be illegal in China, the country is far from shunning blockchain technology and clearly has ambitious plans. SCMP reported that hundreds of positions were open.
While adoption rates need to be viewed with caution, Reuters reported that e-CNY cumulative transaction value had grown close to $10 billion at the last count. In addition to that, the e-CNY wallet has been downloaded some 2.5 million times, and 10 cities are part of the pilot program.
*poke* Do something, USA
Meanwhile, in the USA, officials are discussing theory. Federal Reserve Chair Jerome Powell listed out some requirements for a potential American CBDC. These were user privacy, being “identity verifiable,” being a part of intermediary institutions, and being widely accepted for payments.
Powell’s comments came as finance and military analysts worried that Russian might subvert economic sanctions by instead using the e-CNY.
However, SCMP reported that e-CNY adoption was still behind payment apps such as Alipay and WeChat Pay. With users numbering less than 300 million at the last count and the e-CNY still being in a pilot phase, the central bank’s hiring scheme shows that the CBDC has a long way to go. Ergo, it’s unlikely that the e-CNY will support international adoption at the highest levels of governance, and that too, during a massively unpopular war.
Eyes on you
One country that may not be ready to underestimate the e-CNY is Japan. Former Bank of Japan executive Hiromi Yamaoka said,
“There’s a chance a country like China could promote usage of digital yuan for cross-border transactions and create a currency bloc.”
The Bank of Japan also reported that it is due to start Phase 2 of its CBDC Proof of Concept to stress test the currency’s functions.