China’s Jiangsu Province Integrates Digital Yuan Into Education System
China has taken a raft of measures to try to build momentum in its digital currency, the digital yuan or e-CNY, with the latest step being an expansion into the education system in Jiangsu Province.
China’s digital yuan is a legal tender fully backed by the People’s Bank of China (PBOC) and pegged to the renminbi. Unlike most cryptocurrencies, it is not decentralized or anonymous but is monitored by the PBOC. While adoption has been slow, China has been first off the blocks in developing a central bank digital currency (CBDC) to the point of some level of active use by comparison with its international peers.
Enforcing a payments use case
Jiangsu Province will attempt to establish the use of the digital yuan in its education system by the end of 2025, according to the Jiangsu Education Department. By the end of the year, students studying within the province are likely to be paying tuition fees using the digital currency. The pilot plan that Jiangsu administrators within the province’s Education Department have put together also aims to establish a means through which examination registration fees will be paid in digital yuan, while scholarships will be received in the digital currency.
Zhou Maohua, a researcher with Beijing-headquartered Everbright Bank, told China Daily that it is imperative that more users are registered and go on to actively use the digital yuan to further its development.
“The establishment of infrastructure for the digital yuan should be further accelerated,” said Maohua. “Its software and hardware must be upgraded to improve user experience. The security and reliability of the system must also be strengthened,” he added.
Over the course of the past three months, four million digital yuan accounts have been opened by ordinary citizens within Jiangsu Province. Total e-CNY transactions have reached a level in excess of 200 billion yuan ($29 billion).
Multiple initiatives
In April, the administrators of the city of Changshu, which is situated within Jiangsu Province, announced that it was gearing up to commence paying state employees within the city in digital yuan. Around the same time, officials within the city of Xuzhou, also located within Jiangsu Province, announced that they were in the process of publishing a pilot scheme which will set out a means for promoting China’s e-CNY digital currency.
If that was enough in proving Jiangsu’s commitment to furthering the development of the e-CNY, another Jiangsu Province city, Suzhou, was one of the first locations in China to run a digital yuan pilot scheme in April 2020.
Earlier this month, it was revealed that the French international banking group, BNP Paribas, had partnered with the BOC in enabling an initiative to promote the use of the digital yuan among its corporate clients.
China is working with other countries on a Multiple CBDC Bridge project to explore the feasibility of cross-border fund transfers among different currencies. Launching its own CBDC for cross-border transfers may allow China to reduce its reliance on the US dollar and increase its influence over global trade and monetary policy.
