![]() In an Atlantic Council event on February 14, 2022, Mu Changchun, Director-General of the Digital Currency Initiative at the PBoC stated that there weren a “couple million Renminbi” worth of transactions every day during the Olympics. But it remains to be seen how many users of e-CNY are active. This might be due to greater publicity and coverage during the Olympics. The adoption numbers double between October 2021 and January 2022, which is an interesting phenomenon. The relatively high number of wallets suggests that many wallets were opened, but are not being used for transactions or holding e-CNY balances. This means that the average balances are RMB 3 (~$0.47) for individual wallets and RMB 31 ($4.90) for corporate wallets. Based on the more comprehensive October 2021 numbers,123 million individual wallets and 9.2 million corporate wallets were opened with a transaction volume of 142 million and transaction value of RMB 56 billion (~$8.8 billion). However, earlier this year, some Central Bank officials said that there are 261 million wallets, with total transaction values over RMB 87 billion (~$13.75 billion). The PBoC has not released official numbers on e-CNY adoption and usage since October 2021. The e-CNY, however, functions as legal tender, just like cash, and its adoption is key to creating more competition in China’s payments market. The e-CNY was the only alternative to Visa in the Olympic venues, which was the official sponsor of the Games. AliPay and TenPay (consisting of its payments apps QQ and WePay), boast over 900 million monthly active users each in China. Introducing an alternative to the two payments giants would induce greater competition in the market, and would provide an alternative in case either payments systems are shut down due to cyber attacks or network issues. While the e-CNY system completes transactions at higher speed than Visa, (which is at 1,700 TPS), it is still miles behind payment giants like AliPay and TenPay when it comes to scalability and speed.Ī related goal of the PBoC was to create greater resilience in China’s payments ecosystem in case of disruption to its domestic markets, which are dominated by AliPay and TenPay. ![]() At its peak, AliPay’s system was able to clear 544,000 transactions per second during 2019’s Single’s Day shopping event. Moreover, existing forms of payments in China, such as AliPay and TenPay, already handle larger volumes of transactions at high speeds. Project Hamilton can handle between 170,000 to 1.7 million transactions per second. ![]() To contextualize this, compare it with Project Hamilton, the Boston Fed and MIT-led initiative for the digital dollar. The current rate of transactions per second (TPS) is 10,000, but transaction capability in the future will reach 300,000 TPS. First, it was able to test the scalability and throughput of the e-CNY transactions. Use of the e-CNY during the Olympics fulfilled two important policy motivations for the People’s Bank of China (PBoC). What did we learn? What do they want to achieve? The GeoEconomics Center recently hosted Mu Changchun, Director-General of the Digital Currency Initiative at the People’s Bank of China, and had the opportunity to learn about e-CNY’s latest developments. As reported in the Atlantic Council GeoEconomics Center’s tracker, China leads CBDC adoption and testing, and the Olympic Games provided an international center stage to test the capabilities of the e-CNY. The e-CNY pilot operated in ten regions across China before it was introduced to Olympic Games venues in Beijing and Zhangjiakou in February 2022. MaA Report Card on China’s Central Bank Digital Currency: the e-CNYĪll eyes were on China’s Central Bank Digital Currency, the e-CNY, during the Beijing Winter Olympics Games.
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