Here’s How China Is Expanding Digital Yuan Adoption

China has been working intensively on its digital yuan for its population. The nation has pushed ahead with its plans of using e-CNY beyond the retail consumer.

e-CNY carries zero service charge

According to a report, the digital yuan has been used to grant loans to small and medium enterprises in the three different cities of the country. A concrete producer from the eastern Jiangsu province borrowed around 1.5 million yuan (approx $222,000) from the Agricultural Bank of China. This loan will be paid in e-CNY to the borrower.

It is reported that it is hard for small businesses to acquire loans from the agencies as they carry around 1% to 3% fees with them. However, this transaction was faster while it did not carry any service charge.

It added that a Shanghai based construction materials manufacturer acquired 2.8 million yuan (approx $417,014) in e-CNY. The borrower mentioned that they would continue to discover the use of digital currency. The report highlight that not only loans but China’s digital token has also been used for paying taxes.

Digital yuan users double in a year

Last month, users were given e-CNY vouchers worth 30 million yuan (approx $4.4 million). It was done in partnership with delivery service company Meituan. Around 261 million digital yuan users were recorded by the end of December 2021. The number of users has increased by almost double from October 2020.

Digital Currency Electronic Payment (DCEP) has caught the attention of the US. The report mentioned that US lawmakers have proposed a bill to restrict their applications over digital yuan. It is done in order to reject China.

The Chinese government has been against the use of cryptocurrencies and their industrial development. This led to a nationwide crypto ban back in September 2021. The country once used to be a digital asset mining hub. It used to contribute around 30% of the global hash rate. In the meantime, Kazakhstan and the United States have grabbed the opportunity.