Broader use of digital renminbi triggers application innovations in various sectorsEver since the People's Bank of China, the country's central bank, announced in early April a list of 11 cities joining the trial use of the digital yuan, many first attempts have been made over the past month, largely enriching the e-CNY's application scenarios.Subsidies of up to 1 million yuan ($147,237) were granted in the form of e-CNY to new energy vehicle owners in Sanya, Hainan province on May 10, which was the first of its kind in the country. Another 4 million yuan in subsidies of the same type will be provided in the following months, according to the Bank of Communications Sanya branch, which was in charge of the subsidy distribution.More than 200 companies in Shenzhen, Guangdong province, were linked to a new prepaid e-CNY platform on May 6, which was the first such application in China. The platform is first experimented in education and training institutions, gyms, and beauty and hair salons. Consumer payments will be collected in the e-CNY wallet first and payments will automatically be made when the service is completed.In late April, Guo Sheng Inclusive Finance located in Qingdao, Shandong province issued a consumption loan and a business loan to two borrowers by using the digital yuan. Although both were small amounts, they have ushered in the e-CNY's application in a closed-loop financing scenario.Officials from the Qingdao municipal financial regulatory bureau considered this a major breakthrough in inclusive finance. With the application of the digital yuan, companies will accelerate their digital transformation, while individuals and more small and micro-sized enterprises will be helped financially.Technology companies can also provide solid proof showing the strides that the digital yuan has made.Alipay, the digital payment arm under e-commerce juggernaut Alibaba Group, launched a search function for e-CNY on May 5, with which users can open digital yuan wallets and make one-stop e-CNY payments and transfers. Online food delivery services provider Meituan said on May 7 that more than 4.4 million users have experimented with the e-CNY payments. E-retailer JD said on May 8 that over 250 million yuan of transactions made on its platform were completed via e-CNY from December 2020 to May 2022.The PBOC announced on April 2 the third group of regions that will conduct e-CNY experiments, including Tianjin, Chongqing, Guangzhou, Fuzhou, Xiamen, and the six cities relating to the 19th Asian Games. Commenced in April 2020, the e-CNY application is now promoted in 23 Chinese cities.The PBOC said in a meeting in late March that research of e-CNY should be further advanced while the application expands in an orderly manner. Continued efforts should be made to optimize the design and use of the digital yuan, according to the central bank.Wang Weiyi, chief analyst for the non-banking financial industry at Ping An Securities, said that the PBOC has extensive cooperation with traditional financial institutions, internet companies and retailers. The digital currency's issuance and circulation are closely connected to various transaction scenarios, which helps to consolidate the groundwork for the proliferation of the e-CNY.According to Yang Zeyuan, chief analyst for the computer industry at CITIC Securities, the e-CNY is positioned to substitute part of the money in circulation. As there is no preset technology route for the design of e-CNY, the digital currency is likely to breed more innovative application scenarios, which will be translated into new business models and market opportunities.Broader use of digital renminbi triggers application innovations in various sectorsEver since the People's Bank of China, the country's central bank, announced in early April a list of 11 cities joining the trial use of the digital yuan, many first attempts have been made over the past month, largely enriching the e-CNY's application scenarios.Subsidies of up to 1 million yuan ($147,237) were granted in the form of e-CNY to new energy vehicle owners in Sanya, Hainan province on May 10, which was the first of its kind in the country. Another 4 million yuan in subsidies of the same type will be provided in the following months, according to the Bank of Communications Sanya branch, which was in charge of the subsidy distribution.More than 200 companies in Shenzhen, Guangdong province, were linked to a new prepaid e-CNY platform on May 6, which was the first such application in China. The platform is first experimented in education and training institutions, gyms, and beauty and hair salons. Consumer payments will be collected in the e-CNY wallet first and payments will automatically be made when the service is completed.In late April, Guo Sheng Inclusive Finance located in Qingdao, Shandong province issued a consumption loan and a business loan to two borrowers by using the digital yuan. Although both were small amounts, they have ushered in the e-CNY's application in a closed-loop financing scenario.Officials from the Qingdao municipal financial regulatory bureau considered this a major breakthrough in inclusive finance. With the application of the digital yuan, companies will accelerate their digital transformation, while individuals and more small and micro-sized enterprises will be helped financially.Technology companies can also provide solid proof showing the strides that the digital yuan has made.Alipay, the digital payment arm under e-commerce juggernaut Alibaba Group, launched a search function for e-CNY on May 5, with which users can open digital yuan wallets and make one-stop e-CNY payments and transfers. Online food delivery services provider Meituan said on May 7 that more than 4.4 million users have experimented with the e-CNY payments. E-retailer JD said on May 8 that over 250 million yuan of transactions made on its platform were completed via e-CNY from December 2020 to May 2022.The PBOC announced on April 2 the third group of regions that will conduct e-CNY experiments, including Tianjin, Chongqing, Guangzhou, Fuzhou, Xiamen, and the six cities relating to the 19th Asian Games. Commenced in April 2020, the e-CNY application is now promoted in 23 Chinese cities.The PBOC said in a meeting in late March that research of e-CNY should be further advanced while the application expands in an orderly manner. Continued efforts should be made to optimize the design and use of the digital yuan, according to the central bank.Wang Weiyi, chief analyst for the non-banking financial industry at Ping An Securities, said that the PBOC has extensive cooperation with traditional financial institutions, internet companies and retailers. The digital currency's issuance and circulation are closely connected to various transaction scenarios, which helps to consolidate the groundwork for the proliferation of the e-CNY.According to Yang Zeyuan, chief analyst for the computer industry at CITIC Securities, the e-CNY is positioned to substitute part of the money in circulation. As there is no preset technology route for the design of e-CNY, the digital currency is likely to breed more innovative application scenarios, which will be translated into new business models and market opportunities.
