Chinese State Banks Aims to Expand e-Yuan Use in Insurance Products

The Digital Yuan or e-yuan, the CBDC developed by the People’s Bank of China is nearing the final stages of its trial phase that has expanded to numerous provinces and cities. The total value of e-yuan trnsacted during the trial phase has reached $5.3 billion in June. Now State-owned China Construction Bank is exploring the use of e-yuan beyond small retail payments.

As per a report in SCMP, the State Bank is looking to utilize e-yuan for buying investment funds and insurance products. The bank has started to work alongside Shanghai Tiantian Fund Distribution to allow e-yuan holders to make payments for its investment funds.

Zhang Min, executive vice-president of China Construction Bank said,

“We have since 2017 been participating in the research and development of the central bank digital currency, which we view as significant for our payment system due to its ability to enhance payment efficiency,”

Digital Yuan Trials in Final Stages

China is currently years ahead of its counterparts when it comes to the development of soverign digital currency. The Chinese Central Bank started working towards their CBDC back in 2014 when most of the other nations were not necessarily even aware of it. Now that over a hundred countries are working towards launching their own, China has a considerable advantage.

The trials for the digital yuan began in 2019 itself starting with travel subsidiaries allotted to government employees. This was later expanded to the retail markets and chains where people can buy their daily need items using the CBDC. The Central Bank and state banks later expanded the trial area to a number of new provinces, where they airdropped millions of e-yuan for selected users.

The central bank said it has created 7.23 million digital wallets for individual customers and 1.19 million for companies. Bank of Communications (Bocom) executive vice president Qian Bin explained,

“China’s central bank digital currency is a form of legal tender, and from the perspective of a commercial bank, it is our obligation to facilitate the development and liquidity of the currency,”