China’s Digital Yuan has grown rapidly, with transaction volumes exceeding $1 trillion, beating the combined activity of USDC and USDT.
China’s Digital Yuan has seen significant growth, with transaction volumes exceeding $1 trillion, surpassing the combined activity of stablecoins like USDC and USDT.
This milestone comes after over a decade of development and four years of intensive pilot testing across 17 regions, as explained by Lu Lei, Deputy Governor of the People’s Bank of China (PBOC).
The digital currency initiative is also expanding globally, with cross-border projects aimed at enhancing global payment systems.
China’s Digital Yuan Exceeds $1 Trillion, Outpaces USDC and USDT
According to a recent report by Chinese media outlet Caixin Global, China’s digital Yuan has surpassed $1 trillion in transaction volume.
Last week, during a series of press conferences organized by the State Council Information Office of China, Lu Lei discussed the digital yuan’s progress.
He explained that the digital RMB is being piloted in 17 provinces and regions, with its use expanding into industries such as wholesale, retail, hospitality, tourism, education, and healthcare.
The currency is designed for both online and offline transactions, with solutions that can be widely adopted.
By the end of June, digital RMB transactions had reached nearly 7 trillion yuan, or close to $1 trillion.
This transaction volume is higher than that of USDC ($5.38 billion) and USDT ($45.16 billion), showcasing the digital yuan’s widespread adoption.
Leading the Way in Global Financial Innovation
Lu Lei emphasized the digital RMB’s role in promoting financial inclusivity, improving payment efficiency, boosting consumer spending, encouraging environmentally friendly practices, and enhancing the business environment.
He highlighted that the digital yuan’s success follows a decade of research and extensive pilot testing in various regions.
Lu explained the creation of a dual-layer operational structure, involving oversight by the central bank alongside participation from financial institutions, to manage the digital currency effectively.
Over six years of research and more than four years of pilot implementations have proven the digital RMB’s alignment with the needs of the digital economy and its reliability.
Additionally, Lu discussed China’s participation in an international digital currency initiative with Hong Kong, Thailand, and the UAE, facilitated by the Bank for International Settlements.
This project aims to improve cross-border payments and has already enabled transactions between participating countries, signaling potential for further international collaboration.
Stablecoins Could Expand Yuan’s Global Reach, Says Circle CEO
Although China has banned decentralized cryptocurrencies, it continues to develop and promote its digital yuan.
Circle CEO Jeremy Allaire recently suggested that stablecoins, particularly a yuan-based stablecoin, could enhance the global use of China’s currency.
He argued that stablecoins might be more effective for international trade involving the yuan than the digital RMB itself.
Despite banning cryptocurrencies in 2021, China’s efforts to issue the CBDC have progressed significantly. By January 2023, approximately 13 billion digital yuan were in circulation.
While the digital RMB could potentially replace traditional currencies and stablecoins like USDT, it is not classified as a stablecoin.
Users can convert other cryptocurrencies into digital yuan through platforms like MetaMask or China’s proprietary conversion portal, as noted on the official website.
This reflects China’s strategy to integrate modern financial technology while maintaining control over its digital financial ecosystem.
