The digital Yuan can be touted as the most advanced central bank digital currency (CBDC) yet. After developing the state-backed cryptocurrency for years, China continues to add new sectors where residents can spend their digital money, and the latest seems to be electricity bills.
According to Economic Information Daily, a local financial media outlet, a digital yuan wallet app created by China’s central bank would contain an electricity bill payment option designed by the country’s State Grid.
Per the report, unlike other third-party mobile payment applications, users will be able to pay their electricity bills directly through the digital yuan app and will not be required to link payment to a bank card.
However, the new function will be tested in nine cities and areas, including Xiong’an New Area, Suzhou, Chengdu, Shanghai, Xi’an, Dalian, Changsha, and Qingdao, as well as at the 2022 Winter Olympics in Beijing.
The addition of the electricity bill payment capability expands the e-CNY ecosystem and adds to the new currency’s circulation in the nation.
The new report comes after the People’s Bank of China’s (PBOC) Shenzhen branch and the local subsidiary of Pingan Property Insurance became the first to employ e-CNY for insurance purposes. The The program pays out 300,000 yuan ($46,346) for COVID-19-related deaths, 50,000 yuan ($7,724) for coronavirus diagnosis, and 50,000 yuan ($7,724) for accidental deaths.
To promote spending, China has distributed digital yuan in nine major cities, as well as public transit networks in Beijing. Both Chengdu and Suzhou have lately begun to accept digital yuan payments. The People’s Bank of China issued its first white paper on the digital yuan last month. According to the white paper, almost 21 million personal wallets were opened during the e-CNY trials, with transactions totaling roughly 34.5 billion yuan (US$5.3 billion).
Privacy Concerns about Digital Yuan
Meanwhile, three US senators have expressed serious concerns over American athletes’ use of digital yuan during the Beijing Olympics. As such, Republicans Marsha Blackburn, Cynthia Lummis, and Roger Wicker have urged for the United States national team to essentially boycott China’s digital money.
Beijing has even responded to these concerns and has brushed off the U.S. lawmakers’ concerns.
“We suggest they figure out what a digital currency really is,” said Zhao Lijian, Chinese Foreign Ministry spokesman.
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