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August 3, 2022

Digital Yuan Loan Now Offered in China

The Agricultural Commerce Bank of Zhangjiagang, which is located in the province of Suzhou in China, made the announcement on Wednesday that it had issued a 500,000 digital yuan (e-CNY) loan with intellectual property backing it as collateral.

The news of the loan’s issuance was reported by the local news outlet Sohu. The municipal authorities, the city’s consumer markets regulator, and the city’s financial markets regulator all gave their unanimous permission before the loan was distributed.

The firm that will get the loan is not identified in the paper; nonetheless, it is an organization that produces environmental protection equipment for steel plants in the province of Suzhou.

According to what was shared by the organization, because of an increase in the number of customer bills, it made the decision to conduct an experiment with a novel form of borrowing money, in which the loan was immediately released into its digital yuan wallet.

In the meanwhile, the Agricultural Commerce Bank of Zhangjiagang said that this was yet another test that was being conducted as part of the country’s e-CNY pilot program.

Two days earlier, the People’s Bank of China said that it intends to increase the number of testing locations for the e-CNY, which are now located in 15 provinces around the country.

Since its debut, there have been a total of 264 million e-CNY transactions for a combined 83 billion CNY ($12.29 billion), as reported by the central bank in its most recent statistics update on May 31. E-CNY is accepted as a form of payment at over 4.567 million different merchant terminals in China.

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In addition, 64 businesses that are listed on the stock exchanges in Shanghai and Shenzhen and with a combined market valuation of $82.9 billion are investigating blockchain technology.

In recent weeks, it seems that China has boosted its attention on building its own central bank digital currency. In doing so, it has cited the advantages of increasing consumer spending as a justification.

This comes after COVID-19 lockdowns had a negative impact on the economy. Participants may presently claim prizes and utilize them at a variety of merchant platforms thanks to the many different digital yuan airdrops that are currently underway.