China Now Has 10 Million Digital Yuan Pilot Users – PBoC Official

The whitelist of users for the pilot phase of the digital yuan has reached 10 million, Vice President of the People’s Bank of China (PBoC), Fan Yifei, has hinted during a State Council’s regular policy briefing.  The top bank official made the point as he answered questions at the briefing on Thursday July 8 including those related to the central bank’s plan for the next step with regard to private digital currencies.  

China has been trialling the digital yuan across many cities ahead of next year’s Beijing Winter Olympics which is expected to be the next key step in the pilot. Yifei said they would vigorously promote the central bank’s digital currency while they continue to observe and study private digital currencies such as Bitcoin and stablecoins which he says have “become a speculative tool” and constitute “potential risks that threaten financial security and social stability.” 

He also notes that private digital currencies have “become a payment tool for some money laundering and illegal economic activities” and global stablecoins may pose risks and challenges to the international monetary system, payment and settlement system etc., which worries the PBoC hence their taking some measures.

It could be that one of the instances of the measures taken is what has been tagged a part of its continued crackdown on crypto-related activities within China’s borders. The country confirmed on Tuesday July 6 the shutdown of a company it claims has been “providing software services for virtual currency transactions. A rough translation of the statement announcing the shutdown that was carried out by joint departments including the Business Administration Department of the PBoC, says the company in question was ordered to close down and its official website discontinued.

The statement, jointly signed by the PBoC department, also reiterates China’s warning to relevant institutions under its jurisdiction to not provide business premises, commercial displays, marketing publicity, paid diversion and other services for virtual currency-related business activities. 

A related development is the reported banning of the China Blockchain Application Research Center, which reportedly has several cryptocurrency exchange owners serving as directors, by the Beijing Civil Affairs Bureau for operating for the past six years without registration. According to a report, the non-governmental non-profit organisation was established in 2015 to improve cooperation between regulatory agencies in China and the blockchain industry as well as promote the training, certification and development of blockchain technology at a global level among other things. 

Yifei’s statement marks the first time the Chinese government would respond to the reasons for the heightened crackdown on Bitcoin recently. Apart from the red packet lottery in which citizens get free digital yuan in their wallets, some of the recent public efforts made to push the CBDC’s adoption includes making it possible for passengers to use it to buy tickets on the Beijing subway. That follows the Industrial and Commercial Bank of China becoming the first in the country to allow its clients to convert digital yuan into cash and vice versa.

In another case, reports say a state-owned bank has included the task of promoting the digital yuan in its employees’ assessment and the number of wallets they secure will affect the year-end bonus of the branch.