Hunan Province, China, Debuts Digital Yuan Loans for Small Businesses – Another CBDC First?
Hunan Province, China, has debuted new digital yuan loans for tech startups – with Beijing keen to explore more central bank digital currency (CBDC) financing options.
Per the Changsha Evening News, via JDZ, three startup founders became the first people to be awarded CBDC loans from the state-owned Bank of Communications.
In a first for the Bank of Communications and the province, around $87,000 in digital yuan tokens was granted as loans on May 12.
This event, part of the bank’s multi-year digital yuan pilot, was marked as significant for digital yuan in the loan sector.
The bank, one of China’s largest, stated that digital yuan enables real-time online lending, saving time and handling fees for all parties.
This development also ensures the authenticity and credibility of credit funds.
Moreover, the bank claimed this move advances “inclusive finance,” promoting local small and micro businesses, and highlighting the potential of the central bank digital currency (CBDC) in the lending field.
Cryptocurrency: Chinese banks court crypto firms in Hong Kong after mainland ban – Bloomberg https://t.co/f77vGLYQDm
— The Edge Malaysia (@theedgemalaysia) March 27, 2023
CBDC Adoption: Is the Digital Yuan Diversifying?
The CBDC was originally planned as a digital “M0” analog as a substitute for cash.
But in the past year, the Central People’s Bank of China (PBoC) and its commercial banking partners have sought to expand its usage.
They have recently focused on ways to use the digital yuan as a financing tool, as well as a cross-border payment tool.
Government organs are exploring ways they can use the digital yuan to make and receive payments from citizens.
And in Jiangsu Province, a city will this month make history by becoming the first to issue 100% of its public sector workers’ salaries in the CBDC.
