- 1 The new use cases are adopted by CBDC. The People’s Bank of China enhances CBDC usage by highlighting its varied usage and advantages.
- 2 The SME feature is embedded with digital Yuan.
According to Changsha Evening News, small and medium enterprises (SMEs) can apply for loans using the digital Yuan. The first transaction was done in the city of Changsha in Hunan province. Three SMEs successfully obtained loans.
The three firms received loans of 583,000 yuan which is around $83,300, after the Hunan Provincial Department of Science and Technology acknowledgment. The funds were processed through the Bank of Communication. It is a commercial bank assisting the PBoC with the digital yuan pilot program.
SMEs Will Enhance Circulation of Credit Funds
Banking officials said that the processed loans for SMEs through CBDCs will protect the genuine and trusted circulation of credit funds. Other benefits include reasonable fees, faster settlement times, and an additional stream of capital for small and medium-sized firms.
With digital currency, online transactions can be done real fast. The person will be able to receive the payments or loans in real-time. At the same time, people can avoid handling the charges, which are considered as fees.
CBDC Can Also be Used in Cross Border Transactions
Besides SME loans, CBDC is also used in cross-border transactions. The authorities are planning to use cross-border yuan trades. This will increase the usage of Yuan digital currency. To trigger the usage of the digital Yuan, French bank BNP Paribas has also announced a collaboration with the Bank of China.
Xuzhou is a hub for departing Chinese goods to Europe, making it essential for the central bank’s plan to increase the adoption rates. The authorities plan to permit digital Yuan to be used in payments. For making international payments in digital Yuan, the PBoC and the Hong Kong Monetary Authority (HKMA) are cooperating.
Changes are involved in the digital Yuan project. The city has participated in many schemes to boost the adoption of digital Yuan. To boost it more, the company has also participated in New Year’s subsidies for shoppers, hardware-based card wallets, and offline payments.
Fall in Transaction Volumes for the CBDC
High-ranking members of the Chinese Communist Party (CCP) have expressed disappointment. The reason for it is the low transaction volume of digital Yuan. The first wave of adoption has raised positive hopes. Regional governments are also exploring options to increase the adoption of CBDC.
The PBoC has observed a decline in the transaction volume and wallet downloads for the CBDC. This fall is seen after the instant rise of implementing the feature of SME. To rule out this dis-engagement, new features like offline payments, and red envelopes are embedded. This is all possible due to smart contract functionalities.
To increase the CBDC adoption, the administration in Changshu in Jiangsu province has declared the salary distribution in digital yuan wallets with their bank accounts. The digital Yuan is already used in securities and cross-border transactions. The SMEs loan feature will show an increase in the usage of this digital currency.
- Super Micro Computer (SMCI Stock) – Price Creates All-Time High - May 26, 2023 10:30 pm EDT
- Coinone Former Executive Jeon Pleads Guilty to Bribery Charge - May 26, 2023 10:00 pm EDT
- Sam Altman With a Lump Sum of $115 Million For His Worldcoin App - May 26, 2023 9:30 pm EDT