Years after its continuous effort to roll out digital currency, China has introduced the usage of the digital Yuan in the real estate sector, with three construction projects receiving payments totalling approximately USD 87,000.
According to reports in the local press, payments were made using the Industrial & Commercial Bank of China and China Construction Bank’s digital wallets.
The decision comes as China’s real estate boom comes to an end. Evergrande, the world’s largest real estate developer, is having difficulty repaying its loans in the face of government restrictions aimed at controlling the boom.
Increased usage of the digital Yuan in the real sector is anticipated to promote financial flow transparency, thereby strengthening the government’s control over the sector, the report said.
Additionally, a Chinese business, Zhengyuan Data System Engineering, is now developing a digital Yuan application for the forthcoming (September) Asian Games 2022 in Hangzhou, Zhejiang province.
China has already implemented the digital Yuan in venues for the recently concluded Winter Olympics 2022, where it was one of the accepted payment methods.
According to reports, cumulative transactions via digital Yuan hit USD 13.68 billion in 2021, with 261 million users.
Apart from that, the Hong Kong Monetary Authority intends to pilot the usage of digital Yuan for shopping and dining, making Hong Kong the first offshore city to do so.
China’s central bank has also broadened the scope of its digital yuan trial. The People’s Bank of China is steadily advancing research and development of e-CNY, as well as expanding the scope of use for China’s digital fiat currency, following two years of trials in several Chinese cities, including Beijing, Shenzhen, and Suzhou, as well as at venues for this year’s Beijing Winter Olympics.
Experts are of the view that China’s nascent digital yuan is on track to challenge the dollar’s dominance of international trade settlements within the next decade.
“Remember, China is the largest trading country and you’re going to see digital yuan slowly supplant the dollar when buying things from China,” Richard Turrin, author of “Cashless: China’s Digital Currency Revolution told CNBC’s “Squawk Box Asia” recently.
