Tag: Digital Yuan

US Congress Proposes Bill to Restrict Government Interactions with Foreign Adversarial Blockchain Networks

by Blockchain News

On November 8, 2023, the United States Congress witnessed the introduction of a significant piece of legislation – H.R.6307. Sponsored by Representative Zachary Nunn [R-IA-3], this bill aims to defend against the economic and national security risks posed by foreign adversarial blockchain networks. The bill has been referred to several key committees, including the House Foreign Affairs, Financial Services, and Intelligence (Permanent Select), for comprehensive consideration.

Central to the bill’s purpose is the prohibition of U.S. government personnel from engaging in business with blockchain companies based in China. This move signifies Washington’s growing skepticism towards China’s role in the cryptocurrency sector. The bill specifically targets iFinex, the parent company of Tether and issuer of USDT, the leading stablecoin by market cap. Co-led by Representatives Zach Nunn (R-Iowa) and Abigail Spanberger (D-Va.), the Creating Legal Accountability for Rogue Innovators and Technology (CLARITY) Act, extends these restrictions to include transactions with Chinese-based blockchain networks.

A key driver behind this legislative move is the concern over national security and data privacy. The bill seeks to prevent foreign adversaries from gaining backdoor access to critical national security intelligence and the private information of Americans. Rep. Nunn highlighted the urgency of addressing China’s significant investments in blockchain infrastructure, citing the potential risks to national security and data privacy.

The bill delineates clear restrictions for government personnel, banning transactions with specific entities like The Spartan Network, The Conflux Network, and Red Date Technology Co., the latter being pivotal in China’s national blockchain initiative and its central bank digital currency (CBDC), known as the digital yuan.

In light of these developments, Red Date Technology responded by clarifying the intended use of the BSN Spartan Network for conventional IT, not crypto. The company has invited U.S. officials to review its open-source code, encouraging independent assessments of their technology.

This legislative proposal follows a trend of increased scrutiny over Chinese technology in the U.S., paralleling earlier actions like the ban on TikTok for government personnel over security concerns. The bill reflects heightened vigilance over foreign involvement in critical technological sectors and the perceived risks they pose to national security.

The introduction of H.R.6307 marks a significant moment in U.S. legislative efforts to address the challenges and risks associated with foreign adversarial blockchain networks. It underscores the importance of maintaining national security and data privacy in the face of rapidly evolving technological landscapes, particularly in the realm of blockchain and cryptocurrencies.

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Chinese Version CBDC (Digital Yuan) Applied to Guangzhou Housing Provident Fund Loans

by Blockchain News

The Guangzhou Housing Provident Fund Management Center has successfully implemented the usage of the Chinese version of the Central Bank Digital Currency (CBDC), commonly known as the digital Yuan, for housing provident fund loans. On June 19th, a lady received a loan of 480,000 yuan through the digital Renminbi (digital Yuan) wallet app, marking the official launch of the digital Renminbi loan application for housing provident funds in Guangzhou. This achievement represents a significant step towards achieving comprehensive coverage of digital Renminbi applications in the housing provident fund system, including deposits, withdrawals, and loans.

Since the introduction of the digital Renminbi service in August 2022, the Guangzhou Housing Provident Fund Management Center has witnessed a steady increase in transaction volumes. The digital Renminbi offers a simple transaction process, fast processing times, and high levels of fund security. The procedures for handling digital Renminbi transactions are similar to regular transactions, supporting counter, online, and mobile transactions. As of now, the center has successfully processed 6,433 digital Renminbi deposit transactions, amounting to 9.0842 million yuan. Remarkably, 97% of depositors have repeatedly used digital Renminbi for housing provident fund deposits. Additionally, 729 digital Renminbi withdrawal transactions have been completed, totaling 6.6706 million yuan. Leveraging the instant settlement feature of digital Renminbi, 464 depositors were able to make timely repayments on the due date, avoiding late fees. Moreover, the system has assisted 164 depositors whose transactions failed due to issues with their bank cards, enabling them to complete their transactions seamlessly.

Moving forward, the Guangzhou Housing Provident Fund Management Center will continue to promote the digitization of the housing provident fund system. Their focus will be on optimizing public services to meet the diverse and specialized needs of businesses and the public. By enhancing the quality of the housing provident fund industry in Guangzhou, the center aims to improve the well-being of city residents and contribute to the overall economic development of the Guangdong-Hong Kong-Macao Greater Bay Area.

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China expands digital yuan usage for cross-border trade

by Blockchain News

China is expanding the use cases for its central bank digital currency (CBDC), the digital yuan, also known as e-CNY, to promote cross-border trade in its Belt and Road initiative. The digital yuan was one of the first CBDCs to be developed and widely tested, with the government having expanded its testing parameter to include multiple cities and millions of people.

Xuzhou, a trade hub in Jiangsu province, plans to promote the use of e-CNY to pay for services and storage charges for goods carried by cross-border trains, according to a plan promoting the use of the Chinese digital currency in cross-border trade that was issued in the city. There are 18 regular cross-border rail connections from Xuzhou to 21 nations in Asia and Europe, making it an ideal location to pilot the use of e-CNY in cross-border payments.

The Hong Kong Monetary Authority (HKMA) is also testing the digital yuan as a cross-border payment tool in the Guangdong-Hong Kong-Macau Greater Bay Area. “The HKMA is working with mainland’s central bank, the People’s Bank of China, to test the digital yuan as a cross-border payment tool in Hong Kong,” said HKMA deputy chief executive Darryl Chan. The Chinese government hopes to improve efficiency and reduce the cost of cross-border transactions with these pilot projects.

Jiangsu province has been proactive in promoting digital yuan use cases, with Changshu, another city in the province, announcing that it will pay civil servants and people who work for public institutions using digital yuan. The Chinese government has ramped up its CBDC efforts at a time when the international trade markets are moving away from the standard U.S. dollar. Recently, China has completed multiple trade treaties with the likes of Russia and India based on their national currency over the U.S. dollar.

While the digital yuan has not yet been officially launched, the government’s efforts to test and expand its usage suggest that it is moving closer to a launch. The expansion of the digital yuan’s use cases for cross-border trade is part of a broader trend towards the digitalization of currencies, with other countries also exploring the use of CBDCs. China’s efforts in this area may give it a competitive advantage in the international trade markets, particularly as countries seek to diversify away from the U.S. dollar.

In addition to its use in cross-border trade, the digital yuan may also have implications for domestic payments in China. The Chinese government plans to use the digital yuan to reduce its dependence on the traditional banking system and to increase financial inclusion for those who are currently unbanked. The success of the digital yuan could also help China to expand its economic influence in the Asia-Pacific region and beyond, as other countries adopt its use in cross-border trade and potentially even domestic payments.

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Changshu Civil Servants to Receive Digital Yuan as Payment

by Blockchain News

Changshu, a city located in the Jiangsu Province of China, has issued a notice stating that all civil servants in its jurisdiction will be paid their full salaries in digital RMB or digital yuan from May 2023. This means that civil servants, including public service personnel, public institution personnel, and personnel of state-owned units at all levels in the city, will receive their salaries in digital yuan payment.

The notice was issued jointly by the Changshu Local Financial Supervision Bureau and the Changshu Municipal Bureau of Finance. In addition to civil servants, an on-site staff member of a local hospital confirmed that the workforce would also receive payments in digital yuan starting next month. Moreover, employees can opt for digital yuan settlements through self-service terminals.

This move is part of China’s pilot program to establish an efficient and convenient digital RMB operation and management system by 2025. The province of Jiangsu, where Changshu is located, has initiated this pilot program for digital RMB in Q1 2023.

China has been pushing for the adoption of its central bank digital currency (CBDC) or digital yuan in recent years. In fact, several Chinese city governments gave away over 180 million yuan ($26.5 million) worth of the CBDC during the Lunar New Year period in February 2023 to boost adoption.

However, the government’s push for CBDC adoption has not been well-received by residents of Hong Kong. In the first four days of the digital yuan hard wallet launch, only 625 Hong Kong residents had signed up, despite a 20% discount on purchases from 1,400 local vendors, subsidized for CBDC owners by the government.

The lack of adoption in Hong Kong is due to various factors, including concerns about the potential loss of privacy and autonomy, as well as uncertainty about the long-term stability of the digital yuan. Despite this, China is pushing ahead with its CBDC adoption plans, and Changshu’s decision to pay its civil servants in digital yuan is just one example of this ongoing effort.

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WeChat Adds Digital Yuan Payment Functionality

by Blockchain News

WeChat, China’s leading social networking and payment app, has now integrated the country’s central bank digital currency, the digital yuan, into its payment services, according to local reports. This move comes after Alipay, another leading payment platform, added the same functionality to its platform in December 2022. WeChat’s addition of the digital yuan fast payment function allows users to make payments on certain mini-programs and platforms that support the digital yuan.

The pilot version of the digital yuan application’s “Wallet Quick Payment Management” page currently lists 94 platforms, now including WeChat, that can be accessed. The integration enables WeChat Pay to allow digital yuan payments on certain apps, such as McDonald’s food orders and bill payments. However, users need to authorize the digital yuan wallet operator to sync their WeChat-bound mobile phone number to activate the fast payment function successfully.

According to Linghao Bao, an analyst at Trivium China, a strategic advisory firm, “Chinese consumers are so locked in WeChat Pay and Alipay, it’s not realistic to convince them to switch to a new mobile payment app. So it makes sense for the central bank to team up with WeChat Pay and Alipay as opposed to doing it on its own.”

The digital yuan, also known as the e-CNY, is being piloted in at least 26 Chinese provinces and cities. The token saw an increase in transaction volumes on Chinese e-commerce platforms during the 2023 Lunar New Year shopping season, helped by e-CNY handouts from authorities.

Alipay had announced its access to the digital yuan acceptance network in December 2022, enabling users to spend digital yuan consumption on platforms served by Alipay, including Taobao, Shanghai Bus, Ele.me, Youbao, Tmall Supermarket, and Hema.

As the digital yuan’s integration with leading payment platforms like WeChat and Alipay grows, it is expected to become more widely adopted in China, potentially challenging existing payment methods like cash and cards. The central bank’s collaboration with these platforms is likely to help broaden the appeal of the digital yuan among Chinese consumers who are already comfortable with these apps.

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PBOC Governor Says Digital Yuan Will Prioritize Privacy Protection

by Blockchain News

Yi Gang, the Governor of the People’s Bank of China (PBoC) has reiterated that discussions on its Central Bank Digital Currency (CBDC) dubbed the Digital Yuan (e-CNY) are more centered on the privacy aspects of its operations to users.

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Speaking at the Hong Kong Fintech Week, Yi said privacy protection is top on its list.

 

Coming off as one of the Central Banks with a vested interest in CBDCs, the PBoC said its e-CNY is mostly focused on retail domestic transactions as a major complement to cash in the digital world. It said in a bid to protect consumer privacy, that it has employed a 2-tier system.

In the first tier, Yi Gang acknowledged that the PBoC facilitates inter-institutional transfers with banks under its jurisdiction. At this stage, no customer information is collected. In tier 2, the banks distribute the e-CNY directly to consumers but obtain only the information that will enable them to stand right by the law.

Yi Gang noted that no entity will be able to probe a transaction without any rigorous legal permission, granting most users the safety they need to embrace the e-CNY.

“The PBOC ensures personal information security through advanced technology and strict management, with full adherence to consumer privacy protection laws and regulations. Transaction-related data is encrypted for storage,” Yi Gang said in the speech further assuring that “Sensitive consumer information is de-identified to non-transacting parties. Entities and individuals are prohibited from arbitrary inquiry or information usage without rigorous legal authorization.”

China comes off as the world’s most advanced economy with a functional CBDC in circulation. While the digital legal tender has not been officially launched for everyone in the country to use yet, its retail pilot tests have been robust, with a presence in top cities including Suzhou, and Shenzhen amongst others.

Yi Gang said the PBoC has an active collaboration with the Hong Kong Monetary Authority (HKMA) as regards CBDC interrelationship and he said the bank is interested in creating other such relationships with other Central Banks around the world.

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China’s Digital Yuan Has Topped Over $14 Billion in Transaction Volume

by Blockchain News

The Chinese Central Bank Digital Currency (CBDC) also known as the e-CNY has hit close to $14 billion (100.04 billion Yuan) from 360 million transactions as it gains widespread acceptance in the country. 

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The People’s Bank of China reported the news and that about 15 provinces have been selected as of August 31 to carry out the work of distributing the digital Renminbi (RMB) across10 institutions in various sectors such as healthcare, education, culture, and tourism. 

The report also revealed that the e-CNY, which meets the public’s demand for mobile payments and provides safe and innovative payments for visitors from outside of China, was included at the 2022 Winter Olympics and Winter Paralympics in Beijing.

A number of e-government platforms have established the Digital Renminbi Payment Services, which encompass both online and offline channels to handle a variety of public utility payments. The e-CNY can also be used to provide tax refund money, special funds for monthly medical insurance payments, funds for helping persons in need, and “specific, special, and novel” Enterprise assistance funds.

The advantages of the e-CNY as a form of legal tender include trust, interoperability, and late development which is helpful in increasing transaction transparency and intelligent level of fund management while lowering settlement and compliance costs.

China is Accelerating The Digital Economy.

Even though the e-CNY doesn’t appear to have increased exponentially since the People’s Bank of China reported it had transacted over $12 billion (87.565 billion Yuan) in January, there is still hope that the number of transactions will rise before the end of the year as the digital renminbi pilot project is put into action.

The Bank of China recently introduced an educational electronic RMB smart contract prepaid fund management product, expanding the pilot’s focus to school education, in partnership with the Education Bureau and the financial authorities of Chengdu’s Longquanyi District.

China has kept up its impressive efforts in perfecting the e-CNY. The digital yuan app now enables users to use the e-CNY to pay for public transportation on 10 bus lines.

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China Central Bank Releases Digital CNY Smart Contract Prepaid Fund Management Product

by Blockchain News

According to the China Financial Association, the Digital Currency Research Institute of the People’s Bank of China has launched a digital renminbi smart contract prepaid fund management product – “Yuanguanjia”.

The product was launched to the public across the country at the 2022 Second China (Beijing) Digital Finance Forum held on September 8.

It aims to provide users with prepaid consumption service scenarios by deploying smart contracts on digital RMB wallets. A solution to prevent merchants from misappropriating funds and protect users’ rights and interests.

This product solves the problem that users avoid merchants running away with prepaid consumption and protects consumers’ rights and interests.

The company that released the digital renminbi smart contract prepaid fund management product-Beijing, Central Business District Xinlian Technology Co., Ltd., said that: “this model transforms prepaid consumption into instant consumption, further clarifies that the ownership of prepaid funds belongs to consumers, and ensures that prepaid funds are not was misappropriated.”

Data shows that the digital yuan (e-CNY), the digital currency of the People’s Bank of China (CBDC), is growing rapidly. Since the public trial, transactions in the new fiat currency have totalled 87.57 billion yuan ($13.68 billion).

Last month The Bank of China, in collaboration with the Education Bureau and financial authorities of Longquanyi District, Chengdu, launched an educational electronic RMB smart contract prepaid fund management product, extending the pilot scope to school education,

As reported on August 25 by blockchain.News, the Beijing municipal government has announced a two-year (2022 – 2024) Metaverse innovation and development plan that will require all districts to follow the newly released Web3 innovation program guidelines.

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$30m e-CNY Airdropped in Shenzhen to Boost Consumer Spending

by Blockchain News

The use of China’s Central Bank Digital Currency (CBDC) is currently being boosted by the city of Shenzhen, according to reports that the authority has airdropped 30 million Digital Yuan (e-CNY) to its residents.

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According to the Shanghai Securities News, the airdrop was aimed at changing the resident’s consumer spending habits to be appropriately revitalized.

Per the report, the airdrop will be made or distributed through food delivery giant, Meituan Dianping, one of the private partners helping the Chinese government with the broad retail testing of the e-CNY. In order to receive the Digital Yuan airdrop, interested users will need to indicate interest in the program by signing up on the Meituan app, and applying for the incentive.

The final beneficiaries will be selected based on a lottery system, a trend which is common to Shenzhen and e-CNY airdrops. Successful residents will be able to spend the issued funds at more than 15,000 merchant stores that accept the e-CNY as payment for goods and services rendered.

The initiative from the Shenzhen city government is not the first of its kind as the officials continue to explore avenues to support the local economy amidst the growing incidence of lockdowns stirred by the Covid-19 pandemic.

The airdrop is also evidence that the CBDC from the People’s Bank of China (PBoC) is a very functional one and very close to a broad national launch. Despite the official launch date of the e-CNY not yet announced, a lot of accolades have been shared as the PBoC pushed for the new legal tender to feature at this year’s Olympic Games held in January. The CBDC also reportedly had transaction figures that surpassed records from international payment giants like Visa.

The report from Shanghai Securities News confirmed that previous airdrops like these are known to bolster consumer spending indeed, and expectations mount that this latest measure will also follow suit.

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The Russia-Ukraine War Might Accelerate CBDC Issuance, Former BOJ Official Says

by Blockchain News

The sanctions slapped on Russia based on its invasion of Ukraine might prompt more nations to adopt central bank digital currencies (CBDCs) as a shield against the U.S. dollar’s supremacy in the global financial system, according to the former Bank of Japan (BOJ) executive Hiromi Yamaoka.

China has already set the ball rolling with its digital yuan. Yamaoka noted: 

“While sanctions using financial infrastructure are necessary in extreme cases like the Ukraine crisis, they are ‘emergency means’ that should not be overused.”

With U.S. allies like Japan joining the sanctions, Yamaoka believes a situation that pushed Russia into default was intentionally developed. 

He pointed out:

“The most effective, powerful weapon was the freezing of Russia’s foreign reserves.”

Following concerns from the Group of Seven (G7) nations, Japan recently requested crypto exchanges to cancel transactions of crypto assets that were subject to asset-freeze sanctions against Russia and Belarus.

Yamaoka stated that national security and defence would become key issues when discussing CBDCs. He added:

“There’s a chance a country like China could promote usage of digital yuan for cross-border transactions and create a currency bloc to counter the dollar’s dominance.”

During his BOJ tenure, Yamaoka was the head of the payment and settlement systems department. Therefore, he is well versed in CBDC and global settlement affairs.

Likewise, speaking on CNBC’s Squawk Box Asia Monday, financial technology consultant and author Richard Turrin shared similar sentiments that China’s digital yuan could counter the dollar’s dominance in international trade settlements this decade. 

He stated:

“Remember, China is the largest trading country, and you’re going to see digital yuan slowly supplant the dollar when buying things from China.”

Turrin added that there was a high likelihood nations would seek other payment channels to stop the current dollar dependence as part of the “risk management exercise.”

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