© Reuters. FILE PHOTO: Governor of the Peoples Bank of China, Yi Gang speaks to the media at the Peterson Institute for International Economics, (PIIE), in Washington, D.C., U.S. April 15, 2023. REUTERS/Ken Cedeno

By Rae Wee

SINGAPORE (Reuters) – Transactions using China’s digital yuan hit 1.8 trillion yuan ($249.33 billion) at end-June, the country’s central bank governor Yi Gang said on Wednesday, marking a jump from over 100 billion yuan as of August last year.

The numbers cement China’s role as a leader among countries that are developing their own central bank digital currencies (CBDC) – digital tokens issued by central banks – although adoption is still in the early stages. The e-CNY, as the digital yuan is called, has so far been used mainly for domestic retail payments.

Speaking at a lecture organised by the Monetary Authority of Singapore (MAS) in the Southeast Asian city-state, Yi said China’s digital currency in circulation reached 16.5 billion yuan as of end-June.

Total e-CNY transactions reached 950 million, with 120 million wallets being opened, Yi said.

Still, e-CNY in circulation accounted for only 0.16% of China’s M0 money supply, or cash in circulation, Yi said.

“And you can see that right now the balance of e-CNY is only counting two-tenths of 1% of M0, so that the balance is very small, but with this kind of balance (we) support a big number of transactions, which means that the velocity is high and more efficient,” Yi said.

Chinese state-owned banks participated last year in a trial focused on cross-border transactions developed by the Bank of International Settlements.

Yi, who was introduced in a slide presentation at the Singapore event as President of the China Society for Finance and Banking – an organisation under the People’s Bank of China (PBOC) – has been widely expected to step down since being left off the ruling Communist Party’s Central Committee during the party’s once-in-five-years congress in October.

The Communist Party named PBOC Deputy Governor Pan Gongsheng as PBOC party chief on July 1, a move sources have said put him in a position to succeed 65-year-old Yi as central bank governor for the world’s second-biggest economy, a position nominated by the government.

When asked about the PBOC succession, Yi declined to comment directly and said: “I am Yi Gang, and also, my title is right here on the screen, and I will… take care of my duty any time in my full capacity.”

($1 = 7.2193 renminbi)