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China expands digital yuan pilot for SME loans to trigger widespread usage


Johnivan0

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The People’s Bank of China (PBoC) has continued its crusade to improve the adoption metrics of its central bank digital currency (CBDC) by adding an array of new use cases.

A report by Changsha Evening News disclosed that small and medium enterprises (SMEs) can now apply for loans using the digital yuan. The city of Changsha in Hunan province recorded the first set of transactions after three SMEs successfully obtained loans.

The three firms received loans of 583,000 yuan ($83,300) after the Hunan Provincial Department of Science and Technology accreditation. The funds were processed via the Bank of Communications, a commercial bank assisting the PBoC with the digital yuan pilot program, with the funds earmarked to cater to operating costs.

Banking officials said relying on CBDCs for SME loans has the benefit of “ensuring the authenticity and credibility of the closed-loop circulation of credit funds.” Other perks include the absence of exorbitant fees, faster settlement times, and an additional stream of capital for small and medium-sized firms.

“Online lending in the form of digital renminbi, not only will the loan funds arrive in real time, but companies can also avoid handling fees and save time in transit when transferring funds in digital renminbi, and realize settlement upon payment,” the report read.

Changsha has been deeply involved with the digital yuan project since its inclusion in the second batch of cities to participate in the trial. The city has participated in several schemes to boost the adoption of the digital yuan, including participating in New Year subsidies for shoppers, hardware-based card wallets, and offline payments.

High-ranking members of the Chinese Communist Party (CCP) have expressed a measure of disappointment over the lull in the transaction volume of the digital yuan following the initial wave of adoption. Ahead of a full-scale launch, regional governments are exploring several options to increase their CBDC adoption.

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On 5/23/2023 at 10:03 AM, Johnivan0 said:

The People’s Bank of China (PBoC) has continued its crusade to improve the adoption metrics of its central bank digital currency (CBDC) by adding an array of new use cases.

A report by Changsha Evening News disclosed that small and medium enterprises (SMEs) can now apply for loans using the digital yuan. The city of Changsha in Hunan province recorded the first set of transactions after three SMEs successfully obtained loans.

The three firms received loans of 583,000 yuan ($83,300) after the Hunan Provincial Department of Science and Technology accreditation. The funds were processed via the Bank of Communications, a commercial bank assisting the PBoC with the digital yuan pilot program, with the funds earmarked to cater to operating costs.

Banking officials said relying on CBDCs for SME loans has the benefit of “ensuring the authenticity and credibility of the closed-loop circulation of credit funds.” Other perks include the absence of exorbitant fees, faster settlement times, and an additional stream of capital for small and medium-sized firms.

“Online lending in the form of digital renminbi, not only will the loan funds arrive in real time, but companies can also avoid handling fees and save time in transit when transferring funds in digital renminbi, and realize settlement upon payment,” the report read.

Changsha has been deeply involved with the digital yuan project since its inclusion in the second batch of cities to participate in the trial. The city has participated in several schemes to boost the adoption of the digital yuan, including participating in New Year subsidies for shoppers, hardware-based card wallets, and offline payments.

High-ranking members of the Chinese Communist Party (CCP) have expressed a measure of disappointment over the lull in the transaction volume of the digital yuan following the initial wave of adoption. Ahead of a full-scale launch, regional governments are exploring several options to increase their CBDC adoption.




 

The People's Bank of China (PBoC) is actively promoting the use of its central bank digital currency (CBDC) by introducing new applications. In Changsha, small and medium enterprises (SMEs) can now apply for loans using the digital yuan. Recently, three SMEs successfully obtained loans totaling 583,000 yuan ($83,300) after receiving accreditation from the Hunan Provincial Department of Science and Technology. The loans were processed through the Bank of Communications as part of the digital yuan pilot program. Using CBDCs for SME loans ensures the authenticity and credibility of credit funds, eliminates high fees, enables faster settlement times, and provides an additional source of capital for small and medium-sized businesses. Changsha has actively participated in various initiatives to promote the adoption of the digital yuan, including subsidies for shoppers, card wallets, and offline payments. In preparation for a full-scale launch, regional governments are exploring different strategies to further increase CBDC adoption.











 

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The People's Bank of China (PBoC) is pushing for wider acceptance of its central bank digital currency (CBDC) by introducing new use cases. Small and medium enterprises (SMEs) in Changsha can now apply for loans using the digital yuan. Three SMEs successfully obtained loans worth 583,000 yuan ($83,300) through the Bank of Communications, thanks to the digital yuan pilot program. Using CBDCs for SME loans ensures credibility, eliminates high fees, enables faster settlements, and provides additional capital for small and medium-sized businesses. Changsha has been actively involved in promoting the digital yuan through various initiatives, and regional governments are exploring options to increase CBDC adoption in preparation for a full-scale launch.

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