140 million digital wallets capable of storing China's central bank digital currency – the Digital Yuan or E-CNY – have already been issued to individuals, and another ten million businesses have signed up too.
So said Mu Changchun, director of the Digital Currency Research Institute of the People's Bank of China, at an event in Hong Kong earlier this week. Those wallet-holders have already spent over ¥62 billion ($9.8B) with the 1.5 million merchants that have signed up to accept the digital currency.
But Mu also admitted that the People's Bank of China is worried about the E-CNY's security. He told the event that the Bank knows digital currencies will attract attention from criminals, so is working on encryption algorithms, data security, and business continuity plans.
The director also revealed that E-CNY payment terminals haven't been well-received. He said work to improve the user experience is needed, and terminals for a wide range of use cases will be needed, so that the digital currency can be used by all merchants.
Mu didn't offer any detail on E-CNY wallet adoption – a notable omission as millions of wallets have been given away, either with balances ready to spend or as part of other promotions. It's therefore hard to know if the 140 million figure represents engaged and excited consumers, the E-CNY-curious, or the financial equivalent of a U2 album that can't be expunged from an iTunes library.
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On the upside, China has clearly conducted a great many successful transactions using its CBDC – and that puts it ahead of all other nations in adoption of the technology. That lead may not, however, be decisive until the E-CNY can be used across borders. Because that's when digital currencies can greatly reduce the cost of transfers and the time required to complete them.
China aimed to debut the E-CNY at the 2022 Beijing Winter Olympic Games, and to have athletes and visitors use the digital currency at the event. Three US Senators warned that athletes using the digital currency could be used for surveillance once athletes return stateside, so urged US reps not to use the E-CNY. COVID-19 placed an insurmountable crevasse in front of Beijing's plan for overseas attendees at the Games to use the E-CNY, as only Chinese spectators will be allowed in person at venues. ®