The loan is part of China's ongoing central bank digital currency (CBDC) pilot testing, and it involves the Chinese municipal bank located in the Suzhou province as well as an unnamed business. According to coingeek.com, the Suzhou Market Supervision Bureau confirmed the loan of CNY 500,000 (about USD 74,000), which was issued to the company in question to fill its capital turnover gap.
The company was reportedly struggling financially in order to keep up with increased product demand. The business manufactures environmental protection equipment and is located in Zhangjiagang’s Nanfeng township.
Prior to issuing the loan, Zhangjiagang Market Supervision Bureau’s Intellectual Property Office conducted an enterprise analysis and created the intellectual property pledge financing product. The Zhangjiagang Financial Supervision Bureau, Market Supervision Bureau, and the Nanfeng Town Government all approved the product.
According to coingeek.com citing local sources, Suzhou-based banks have started offering digital yuan loans to businesses and individuals in July, with amounts ranging from CNY 70,000 to CNY 1,5 million (USD 10,363 to USD 222,074). Provinces such as Shaanxi Province and cities such as Guangzhou have also received access to the scheme.
The loan feeds directly into the user's digital yuan wallet, and it can be repaid on the CBDC platform. Through this platform, regulators can monitor fund flows and track any suspicious activities.
Representatives from the People’s Bank of China cited by coingeek.com stated that more cities are expected to join the CBDC testing phase. China’s recent 2022 digital yuan trial includes the Henan, Fujian and Heilongjiang provinces, as well as the cities of Guangzhou, Chongqing, Fuzhou, and Xiamen. The initial launch of the digital yuan in 2020 targeted cities such as Shenzhen, Suzhou and Chengdu.
The same representative revealed that consumers had performed 264 million transactions using the e-CNY from the start of 2022 to May. These transactions are reportedly worth USD 12.27 billion. According to the People’s Bank of China, about one-fifth of the Chinese population had set up e-CNY (digital yuan) wallets but a combined 44% of Chinese adults say they don’t use the e-CNY app because they either don’t need it, or they don’t know how to use it.
Those who have downloaded the e-CNY app use it for online shopping (72%) and paying for public services, such as public transportation (67%). This comes in the context of China’s pilot schemes, which have included discounts from online merchants and on public transit.
Every day we send out a free e-mail with the most important headlines of the last 24 hours.
Subscribe now