• China’s central bank digital currency (CBDC) will soon be used to buy into public funds and other financial products.
• The move is part of a pilot program in the country by the China Securities Regulatory Commission (CSRC).
• Other applications for the digital yuan have also been implemented, such as replacing ID smart cards and allowing students to use it for their daily campus life.
Digital Yuan Set to Make Debut in Securities Market
Financial service providers in China are set to allow citizens to pay for wealth products using the digital yuan, a breakthrough development for the nation’s central bank digital currency (CBDC). This follows approval from the China Securities Regulatory Commission (CSRC), which is the main regulator of Chinese securities industry.
Using Digital Yuan for Wealth Products
The ruling means that Chinese investors will now be able to use CBDCs when buying into public funds and other “financial products.” They can do this via their smartphones, placing orders 24/7 outside normal trading hours. Furthermore, all transactions made with CBDCs will be fully traceable and cannot be illegally forged or copied.
Pilot Program Rollout
Beijing has not yet announced when this new function of CBDC will go live, but they plan on rolling out a pilot program first with eligible users before conducting zone-wide implementations. With this rollout, securities traders and fund investors will have access to CBDC as a payment option in their trading apps.
Other Applications of Digital Yuan
Apart from its use in securities market, firms at Chengdu Science Park have integrated a digital yuan solution which allows employees to replace ID smart cards with wallets powered by CBDCs. Moreover, several universities located within the pilot zone have adopted it for every aspect of student life on campus such as accessing buildings or making payments within park premises.
These initiatives demonstrate rising acceptance of digital yuan among Chinese citizens as well as businesses who are seeing its potential benefits such as full traceability and secure smart contracts when making investments or purchases using CBDCs. While Beijing has yet to announce an official date for full rollout of these applications across China, it signals an exciting prospect for widespread adoption of digital yuan in near future.