The digital yuan is starting to get serious

A recent survey by the Bank for International Sattlements (BIS) revealed that 86% of national banks are actively considering their own CBDC, 60% are experimenting with the technology, and 14% are implementing pilot projects. In Asia, China, Hong Kong, Japan, South Korea, Singapore and Thailand are already at an advanced stage and have long since launched pilot projects to explore the retail use of CBDCs. Among the major countries in the world, China is the most advanced in development: with seven years of work, the Chinese e-CNY digital yuan, formerly known as the DCEP (Digital Currency, Electronic Payment) project, has already been tested by banks, stores and millions of people across China and will likely be launched in 2022. Launched in several cities since the end of 2019, as of June 30 this year e-CNY has been applied in over 1.32 million scenarios, covering payments of utilities, catering, transportation, purchasing and government services. As reported by China.org, which takes up the news from the China Securities Journal, the Chinese digital currency has entered the real financial life of the country, being used for the first time by the Dalian Commodity Exchange (DCE) for the payment of storage costs to a warehouse delivery, assisted by the local branches of Bank of Communications and Bank of China. The application of e-CNY in the futures market has provided an efficient, cost-free and secure payment alternative for the financial markets through a real-time interbank payment. Jiang Bin, head of the delivery warehouse, said that the e-CNY payment does not charge any transaction fees and is not limited to the period of operation of the payment system so that businesses can keep an eye on the progress of transactions. in real time. Central bank interest in CBDCs comes at a critical juncture. Recent developments have placed a number of potential innovations that have brought digital currencies to the top of the agenda. The growing attention received by bitcoin and other cryptocurrencies and the growing debate on stablecoins have had an important impact but it was the entry of big tech companies into payment services and financial services more generally that pushed towards the acceleration of national digital currencies, primarily e-CNY. “The new trade wars are technological wars”, explained Benoit Coeure of BIS: “The train has left the station”. The push comes at a time when the use of physical cash is decreasing globally and authorities are trying to fend off the threat to their printing powers of the money coming from bitcoin and the efforts of Big Tech like Facebook that just yesterday announced. the development of its own Novi crypto wallet connected to the Diem Blockchain system. David Marcus, head of financial services at Facebook and a member of the board of directors of Diem, explained: “The change is long overdue. It will happen one way or another. Novi is ready to reach the market. We believe it is unreasonable to delay the delivery of the benefits of cheaper, interoperable and accessible digital payments ”.