China has taken another step forward in the adoption and use of its central bank digital currency (CBDC), the digital yuan. Charities in China are now accepting donations through the digital yuan, while the digital currency has also been used in a corporate loan.
The coastal province of Jiangsu recently welcomed its first “online corporate and personal digital yuan donations platform.” The Agricultural Bank of China, a state-run commercial bank, made the first-ever CBDC donation to the Wuxi Charity Federation at a ceremony held earlier this week. The federation provides support for local welfare projects, including education and healthcare support. The Agricultural Bank directly donated just over $21,000 in digital yuan to “Golden Key,” the federation’s scholarship project. Donors receive a digital certificate after the digital funds are received by the charity.
The charity said that the launch of its new platform had seen an increase in donation-related “traffic,” as the use of digital yuan has made the donation process “smoother” and enhanced the credibility of charitable donations. The “open and transparent nature of the digital yuan” is benefiting charities, said the federation. It allows charity donors to ensure the money they send ends up in the wallets of the projects they want to support.
The digital yuan is also known as “e-CNY.” Both “enterprises and individuals” can make digital yuan donations using the app and platform, according to the parties.
In addition to charitable donations, the digital yuan has also made history in the corporate space. The Bank of China, another state-owned commercial bank, issued Chongqing’s first-ever digital yuan corporate loan to an IT-focused firm named Development Co. The firm was lent around $3.4 million worth of the CBDC, according to Chinese media outlet Chongqing Daily.
The media outlet reported that the issuance of digital yuan corporate loans is part of China’s push to promote the popularization of the CBDC in multiple scenarios and sectors. China hopes to showcase the digital yuan to a large international audience for the first time during the Asian Games, which will be held in the country in September. Visitors to the event will be able to use the digital yuan to pay for public transport in host cities.
China has been making significant progress in the development and adoption of its digital yuan. The country began testing the digital currency in several cities in early 2020, before rolling it out to a wider audience. In addition to corporate loans and charitable donations, the digital yuan has been used in various payment scenarios, including public transportation and online shopping.
The adoption of the digital yuan represents a significant shift in China’s financial landscape. The country’s traditional financial system has been heavily reliant on cash, and the introduction of a digital currency could reduce the country’s dependence on physical money. China’s central bank has also stated that the digital yuan could help to promote financial inclusion by providing access to financial services to those who may not have been able to access them before.
While the digital yuan has been praised for its potential benefits, it has also raised concerns about the role of the Chinese government in tracking the spending behavior of its citizens. The digital currency’s centralized design allows the government to monitor transactions, leading to concerns about privacy and censorship. Despite these concerns, China appears to be pressing ahead with the development and adoption of its digital yuan, with more use cases expected in the near future.
