Friday, May 20, 2022

CCB And Bocom Exploring e-Yuan For Buying Investment Funds & Insurance Products

Leading state-owned banks of China are now exploring new ways that could help the e-yuan holders to buy investment funds and insurance products online, according to a report published by the South China Morning Post.

In order to enhance its pilot program, China Construction Bank has collaborated with Shanghai Tiantian Fund Distribution, a platform owned by East Money and e-commerce giant JD.com. The aim of this collaboration is to help digital yuan holders in making online fund investments. 

On August 27, while releasing the bank’s interim result briefing, Zhang Min, the executive vice-president of CCB, stated, “We have since 2017 been participating in the research and development of the central bank digital currency, which we view as significant for our payment system due to its ability to enhance payment efficiency.”

Till date, a total of 7.23 million individual users and 1.19 million companies have digital wallet accounts for e-yuan. 

CCB, in its public statement, mentioned that it has recorded around 28.5 million transactions in e-yuan amounting to $2.9 billion, as of June.

Bank of Communication (Bocom) is another state-owned Chinese bank that is exploring the central bank digital currency (CBDC) to fund management and insurance companies. 

Qian Bin, the executive vice president of Bocom, was also part of the interim results briefing. 

At the interim results briefing, Qian said, “China’s central bank digital currency is a form of legal tender, and from the perspective of a commercial bank, it is our obligation to facilitate the development and liquidity of the currency.”

Additionally, he mentioned, “We have made a lot of preparations to ensure the high efficiency and steady operations of the e-yuan system.”

Presently, Qian has not mentioned the names of fund managers and insurance firms with which it is working. 

As of June, Bocom recorded 6.3 million digital yuan transactions totalling $38.69 million.

According to the report, Beijing has initiated its e-yuan pilot program in 11 areas and cities in the country. It further has announced to extend its pilot program in February 2022, during Beijing Winter Olympics. 

In July, the People’s Bank of China (PBoC) released its whitepaper notifying that by the end of June 2021, a combined 34.5 billion yuan had been spent through 70.75 million transactions.

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