Economie

China digital currency is surpassing e-CNY retail experiences

Experiments with the Chinese digital yuan have grown beyond consumer use of individuals to cover corporate loans and taxes, as Beijing continues to press ahead with its e-CNY plans.

Loans to small and medium enterprises (SMEs) in the form of digital yuan have been granted in at least three cities, according to research by The Post.

The latest case was in Suzhou in eastern Jiangsu province, where a concrete producer borrowed 1.5 million yuan (222,000 U.S. dollars) from the Agricultural Bank of China with the proceeds used to pay suppliers in electronic currency Chinese yuan, according to a report issued by the state Tuesday. Daily.
Because e-CNY was used in the transaction, funds transferred “quicker” and “without service fees” compared to traditional lending, according to the report in China, small businesses are finding it difficult to borrow from banks, so they often turn to lending agencies for help – But that can come with a fee of between 1 and 3 percent.

According to the report, a plastic products maker in Xiamen, southeastern Fujian Province, earlier this month also borrowed 90,000 yuan in digital form from Chengtai Microcredit, a microcredit agency, and in April, a hospitality company in Qingdao, Shandong Province borrowed the same amount from the platform Online Lending Guo Sheng Inclusive Finance.

Meanwhile, Shanghai-based building materials manufacturer Zhongxiang raised 2.8 million yuan in e-CNY through factoring, a type of financing in which a company sells its dues or invoices to a third party to meet short-term liquidity needs.

The borrower, SY Holdings Group, said it would continue to explore the use of the digital yuan at construction sites and hospitals.

Besides loans, the digital currency – officially called Digital Currency Electronic Payment (DCEP) – has been used in Chongqing municipality for tax purposes and local home decor provider Powerdekor has paid 3,009 yuan using its CNY e-wallet via the Industrial and Commercial Bank of China, China’s largest bank.

In March, DCEP was used to transfer construction fees of approximately 555,000 yuan of state-owned assets of state-owned Suzhou Highspeed Railway Xincheng to Suzhou Baorong Construction Project Management Co., Ltd.

“Promoting the digital yuan to business operators is easier than doing it with hundreds of millions of individual consumers,” said Wang Bingbo, an analyst at consultancy BoTong Analysys. of e-CNY traceability and express settlement at checkout.”

Since China began trials of DCEP in 2019, more than 20 cities have conducted consumer-targeted promotions, offering coupons worth hundreds of millions of yuan.

In the latest batch, Shenzhen late last month launched a new round of awarding e-CNY vouchers worth 30 million yuan in partnership with delivery service giant Meituan.

The money can be spent on groceries, food delivery and bike rentals through the Meituan app, as well as at select offline stores.

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