The Chinese government began testing its newest central bank digital currency, e-CNY, on Tuesday, August 23. Officials notified citizens that they could now use e-CNY to pay for public transport. However, this will depend if the digital transactions are more convenient to use than traditional methods, as the officials said.
The e-CNY payment currently works on ten transit routes in Guangzhou, allowing passengers to make a deposit and scan the QR code on the bus’ payment zone. Anybody can download the e-CNY app for free to do such transactions.
- Chinese government starts testing e-CNY payment for public transportation transactions
- New CBDC to provide more convenient transactions
- e-CNY applied for transit routes Guangzhou and Ningbo
More Utility for the Citizens
Guangzhou marks the first city in the country to apply the newest CBDC for payments, including employee housing fund contributions. The city of Ningbo followed up with residents paying for train rides with e-CNY for 125 stations. Passengers only need to scan the QR code and go directly aboard the train.
Based on the results, the usage of e-CNY provides seamless pacing for the citizens. While it is still experimental, the Chinese CBDC will continue expanding to other cities to shift how people transact slowly. If the results constantly show positivity, stores across China may soon allow e-CNY payments.
The Chinese government also partnered with JD.com and Meituan, two of the largest commercial companies in the country. They plan on hosting e-CNY airdrops in specific regions to encourage consumer spending despite the COVID-19 quarantines.
Six million users have already used e-CNY for payment, with many of them citing that the transactions are faster and better than cash or credit. The e-CNY CBDC was recognized as a legal tender in May 2022 despite the government’s transparent opposition to cryptocurrency and blockchain technology.
According to a JD.com report, there were over 4 million e-CNY transactions, summing up to 900 million CNY (131.6 million USD).
Government Continues Crackdown Against Cryptocurrency in the Country
2021 marked an infamous year for cryptocurrency as the Chinese government’s announcement of banishing crypto mining from the country caused a significant correction to the crypto market. Following the government’s statement, Bitcoin’s value decreased drastically in June 2021, causing a massive dip in the altcoin market down to 50%. The fear later followed up with the Evergrande collapse of September 2021 – the second most prominent real estate company that left a large debt blowup that put the housing market on the brink of collapse.
Cryptocurrencies were banned entirely from the country as the year ended, forcing Bitcoin miners to shut down their facilities. The crypto community speculated that some miners fled the nation to find an appropriate spot. All supposed NFT projects from large Chinese companies like Tencent and NetEase had to stop by the government’s order.
To keep its citizens and economy in check, the government implemented the digital Chinese Yuan, e-CNY. This way, the money stays centralized and prevents citizens from laundering large sums of money into a decentralized network. To this day, the government continues to look for Bitcoin mining hubs to crack down on.