China will be expanding the scope of current digital yuan trials to the whole of some of its most populous and developed provinces by the year’s end, according to a senior central bank official.
The entirety of the provinces of Guangdong, Jiangsu, Hebei and Sichuan will be piloting the digital yuan, also known as the e-CNY, by the end of 2022, Fan Yifei, deputy governor of the People’s Bank of China, was quoted as saying this week by the Shanghai Securities News.
Some major cities in these provinces have already started pilots of central bank digital currencies (CBDCs), the digital form of a country’s fiat currency.
If the expansion happens as announced, the entire pilot area in mainland China would encompass five provinces plus another 16 cities outside those regions. The area would cover a population exceeding 572 million, according to Forkast calculations.
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China’s e-CNY has been in trials since 2014 and is regarded as the most advanced among other leading economies testing the concept.
There are still 13 provinces and regions in the country that have yet to start testing the digital yuan, including Xinjiang, Tibet and Inner Mongolia. Most of these provinces are in the inland parts of China and have less developed economies.
Chinese officials have enormous ambitions for the digital yuan, but, for now, consumers appear much less keen to use it compared to existing forms of payment.
Digital yuan transaction volumes in the first five months of 2022 stood at just 83 billion yuan (US$11.8 billion), compared with 31.58 trillion yuan (US$1.93 trillion) in the first quarter of the year for payments made via mobile devices, according to a central bank report.