China's state-backed digital yuan, or e-CNY, has been used to purchase securities for the first time, according to a local report on Monday. According to the report, users can now use the e-CNY, essentially China's central bank digital currency (CBDC), to buy securities via the Soochow Securities mobile app.
The Middle Kingdom has been expanding the uses cases of its central bank digital currency. Last week, the country included the e-CNY in its cash circulation data, while also adding a function to the e-CNY payments app to allow users to make offline payments.
While classified as a CBDC, the e-CNY does not actually operate on blockchain or distributed ledger technology, and is instead wholly controlled and issued by the People's Bank of China (PBOC), who has highlighted that blockchain technology will be unable to handle the amount of e-CNY transactions.
Are everyday citizens actually using the e-yuan?
Despite the e-CNY app being made available for download by the general public since January 2022, it seems like adoption remains rather low, despite total transactions involving the e-CNY reportedly hitting a milestone of 100 billion yuan (US$14 billion) in October.
Furthermore, Blockhead spoke to a number of Chinese citizens and residents to dig a little deeper into the country's rather isolated digital currency, and we found a range of answers that were rather surprising – not only have some never used it, others have never even heard of it.
One user clarified that the technology is just referred to as "electronic ang bao (red packet)," and even claimed that the e-yuan has been made available on WeChat's wallet since "7 or 8 years ago." While it is understood that the People's Bank of China (PBOC) started developing the digital yuan program since 2014, pilot programs only started in 2020, with the 2022 Beijing Winter Olympics widely reported to be the first major trial of the e-CNY.
Another user, who claims to have not even heard about the e-yuan, merely said that mobile payments such as WeChat and AliPay "remain" the predominant method for financial transactions in China. It has to be noted that WeChat pay launched its e-CNY capabilities early last year, after the PBOC expanded the e-CNY pilot areas to more than 23 cities and special zones.
A user who recently moved to Hong Kong even told Blockhead that he has "no idea" what the e-yuan is.
"If it is government recognised and can be circulated within mainland China, I don't mind using it if I encounter it," he said.