China’s digital yuan roared out of the gate, but stumbling blocks could give it pause

Corruption and a slow adoption of the e-CNY risk undermining the groundbreaking progress that China’s digital currency has made over the past decade

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The cumulative transaction value of China’s digital yuan had reached 7 trillion yuan (US$968 billion) as of the end of June. Photo: Xinhua

Published: 9:00am, 1 Dec 2024

The downfall of Yao Qian, who spearheaded China’s digital currency design at the People’s Bank of China, has raised concerns over the digital yuan’s development.

China’s top anti-corruption watchdog has accused Yao, who was the inaugural director of the PBOC’s institute overseeing digital currency research, and later head of the securities regulator’s tech-supervision department, of taking bribes through cryptocurrencies.

The country’s first cryptocurrency-related corruption case raises questions as to whether Beijing may slow the pace of the digital yuan’s roll-out to strengthen internal supervision.

China began laying the groundwork for its digital yuan in 2014 and has launched trials of its central bank digital currency (CBDC), known as the e-CNY or e-yuan, in select cities since 2019, becoming a pioneer among major economies.

Those pilot tests have been extended to 26 regions across 17 provinces, but China’s central bank has given no timetable for an official launch.

“We do have some bottlenecks in adopting the digital yuan today,” said Charles Chang, director of the Fintech Research Centre at Shanghai-based Fudan University.