Today Mu Changchun, the Director General of China’s central bank Digital Currency Research Institute, shared the latest statistics on the digital yuan trials during the Hong Kong Fintech Festival. The number of wallets opened has increased almost sevenfold since June to 140 million.
While the wallet figure is likely to approximate to the number of people, it’s conceivable that an individual could have multiple wallets, especially because a basic wallet only requires a phone number. If one assumes it is people, 10% of China’s population has tried the digital currency. The number of merchants capable of accepting the digital renminbi is 1.55 million.
Transactions have increased significantly, but in contrast to the number of wallets, the figure has only doubled.
|June 21||October 21|
|Transaction value||RMB 34.5 bn ($5.4bn)||RMB 62 bn ($9.7bn)|
|Average transaction value||RMB 488||RMB 413|
Mr. Mu said there is not yet a specific launch plan and outlined three areas where more work is needed. The first is to expand capacity. China already has a wide variety of wallets and numerous use cases, but he wants to expand it further, saying it is being built for “all merchants”.
Work is ongoing to enhance security and risk management. Central bank digital currencies (CBDCs) are magnets for hackers. So security training and trials are ongoing. These apply to the entire life cycle of the eCNY, including the encryption algorithm security, financial information security, data security and ensuring business continuity.
The final area is the regulatory framework. Mu noted that a revised draft of the People’s Bank of China Law includes the renminbi in physical and digital forms. However, he said that “regulatory measures for eCNY need to be tailormade.” By that, we assume he means the rules need to be developed as opposed to the legal framework.
The Director also discussed how small value payments remain anonymous because users can register with just a phone number, and Chinese law prevents sharing of private data with the central bank. We previously covered that topic in more detail.