China’s CBDC now has a smart-contract

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By A D

By the end of 2022, digital yuan accounted for 0.13% of all of cash and reserves held by China’s central bank. Although the CBDC has been utilised in small-scale transactions and to purchase stocks, smart contracts have not yet undergone extensive retail testing.

Meituan, one of China’s most popular lifestyle and food delivery apps, has given China’s CBDC access to smart-contract capability. China launched its digital currency as early as 2020, quickly becoming one of the key nations in the cbdc growth sector. In actuality, the People’s Bank of China included e-CNY to their official currency circulation in December 2022 after valuing it at $2 billion. China was one of the first to adopt CBDC, and its pilot programme includes 5.6 million merchants from up to 26 major cities.
China has used CBDC in a variety of ways, both online and offline. Following the CBDC’s achievement of the milestone of 100 billion Yuan, the e-CNY app has recently introduced features for offline games, stock purchases, and more.

Payees are prevented from improperly withdrawing prepaid funds by expanding smart-contract capabilities and implementing a smart contract-based function. Meituan’s smart contracts enable the distribution of a daily prize of 8,888 RMB ($1,312) in equal parts. The smart contract is activated and searches for specific keywords in the list of items purchased and the merchant name when a user puts an order with the app and pays for it with the digital yuan. The smart contract will distribute a share of the 8,888 RMB to a user’s digital yuan wallet if they happen to possess certain of those daily changing keywords.

a seashell with the symbol of Bahama's digital currency on the sand signifies the Sand Dollar, world's first CBDC
The Bahamas was the first nation to launch a national digital currency, ‘Sand Dollar’. photo credits: coindesk

CBDCs have already made a significant amount of progress as of 2023. About 80% of the central banks around the world are thinking about CBDCs with cross-border payments, minimising financial crimes, and enhancing financial inclusion in mind.
Many nations, like the US, UK, Spain, and others, are testing out their own digital currencies that make references to various ideas while doing in-depth study into scalability and value addition. A number of countries, including the Bahamas, Nigeria, and the Eastern Caribbean Union, have previously created CBDCs to help with speedy payments and stable value. Other nations are either conducting Pilot CBDC trials or conducting research and development for their programmes.

Traditional financial markets were unstable in 2022, and the cryptocurrency markets experienced extremely high volatility. CBDC strives to be innovate in a way that will benefit society and the economy most broadly. As a matter of fact, CBDC was selected by the G20 Summit as the main technological innovation challenge, with WEF’s call to action to deliver practical answers and quicken research and development.
There are more over 100 CBDCs in research or development phases, compared to 35 countries considering issuing one in 2020, two years earlier. However, each country has a distinct motivation for implementation, which is now made worse by geopolitical fragility and financial volatility.

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