What is the yuan coin?
The Yuan Coin, also known as e-CNY, e-RMB or e-yuan, is China's digital currency. It aims to replace some of the physical cash in circulation.
The coin, issued by the People's Bank of China (PBOC), is a digitised version of the Chinese physical Yuan (Renminbi). It works the same as banknotes and coins but in a digitised form.
The yuan coin history
China has been working on the e-yuan since 2014. In October 2020, the virtual coin underwent its first and biggest real-world test. The local government of Shenzen handed out 10 million e-RMB (about $1.5 million) to its citizens in a lottery.
In December 2020, the Suzhou local government again handed 20 million e-RMB ($3 million) to its residents in a lottery.
A few features not activated in the Shenzen trial were tested in the Suzhou trial run. One notable feature is the e-CNY offline feature, allowing users to touch smart devices to make transfers.
The Suzhou public test also saw JD.com (one of the biggest Chinese e-commerce firms) become the first online platform to accept this virtual currency.
In Feb 2021, the Chinese capital city Beijing handed out 10 million e-RMB (about $1.5 million) to its residents, making it the third largest public test for the digital currency. The same month Chengdu, another city in China, announced the issuance of close to $6 million worth of e-RMB to its citizens.
The yuan coin so far in 2022
As of 2022, a lot has happened to the benefit of e-RMB. The digital Yuan app, previously only available to a few people, can now be downloaded from the Chinese app stores. It is compatible with both iOS and Android devices.
The app, however, can only be used by residents in 23 cities where China continues to test this virtual currency. Residents in the cities, which include Shanghai, Beijing, and Shenzen, can use the app to pay for goods and services with e-CNY.
By mid-January, the app had over 261 million users and had made 87.5 billion e-CNY ($13.78 billion) worth of transactions. The app quickly became one of the most downloaded apps available in China.
Shortly after the app launched, WeChat, a messaging and payment platform with over 1.2 billion users, announced it would begin to allow users to select e-CNY as a payment option. Alibaba also announced the integration of this virtual currency into their payment options.
The e-CNY is no longer just a payment option for consumer goods. One can also use it for wealth management products and bank loans. There are plans to extend the use of this virtual currency to medical treatment, education, and other finance offerings.
Holders of e-CNY have also benefited from cards with small LCD screens that tell them how much funds are in their Yuan accounts. Users can access these updated local Chinese government cards without the internet.
The popularity and wide acceptance of the e-CNY have seen China set its eyes on the international market. The country is working towards the internalisation of its virtual currency.
While the e-yuan is still in its early stages, it has quickly proven there is demand and room for it. The digital coin is not a cryptocurrency per see but a central bank digital currency (CBDC), considering it is issued and controlled by the People's Bank of China (PBOC). CBDCs are built on the same rails as cryptocurrency's underlying technology, blockchain. Some see CBDCs as a threat to privacy and defeat the purpose of decentralisation, while others believe its adoption does benefit the crypto market. What do you think?
Author: Jay Jackson
Jay Jackson is a crypto trader, researcher and freelance writer. He works closely with people and businesses in the crypto sphere, writing blog posts, guides, press releases, reviews and ebooks.