Government-backed Chinese banks have reportedly begun investigating new uses for the digital yuan by allowing citizens to use it to buy insurance products and mutual funds online.
The South China Morning Post reported on Tuesday that leading Chinese banks such as Bank of Communications (Bocom) and China Construction Bank (CCB) are working with fund managers and insurance companies to enable e-yuan payments in sectors outside the retail sector.
The report states that CCB has worked with the Shanghai Tiantian Fund Distribution investment fund platform, which enables citizens to invest using online digital yuan funds. The Chinese e-commerce company JD.com will also be part of this cooperation. CCB Executive Vice President Zhang Min said:
“Since 2017, we have been participating in the research and development of the central bank’s digital currency, which we consider important for our payment system due to its ability to increase payment efficiency.”
CCB reportedly opened a total of 8.42 million e-yuan wallets for 7.23 million individual users and 1.19 million companies. Bocom Executive Vice President Qian Bin said the bank is currently investigating numerous cases of the use of e-yuan in fund management and the insurance sector.
The efforts of state-backed banks go beyond the central bank’s original digital currency plan set by the Chinese central bank, which was designed only to power an environment with low daily retail payments.
Exclusion of BTC
Despite China’s aggressive move to make the digital yuan mainstream, the government has sought to exclude the use of Bitcoin (BTC) and other digital currencies within its jurisdiction.
Yin Youping, deputy director of the People’s Bank of China’s Office of Consumer Financial Protection, recently said the government intended to keep the situation “under high pressure” on crypto transactions.
China does not like cryptocurrencies, but wants to become a world power in the use of blockchain and CBDC technology. So far they are doing very well, we will soon see what impact it will have on their and other economies.