China’s efforts to develop a centrally issued digital currency took a leap forward on Sunday when the state-owned Agricultural Bank of China launched the first digital yuan ATMs.
Have customers at selected locations in the Shenzen region Reportedly started spending and converting the digital yuan they received as part of China “Red envelope” raffle, donating $ 3 million in new currency to 100,000 local citizens.
The ATMs reportedly allow the deposit and withdrawal of digital yuan through a smartphone app and allow users to exchange cash and savings to and from the central bank’s digital currency.
The Agricultural Bank of China is one of the country’s “four major” state-owned banks, which collectively represent the world’s four largest banking institutions. Manager of the bank’s Digital Yuan Innovation Lab, Zou Hua, said the ATM rollout was part of the effort to guide citizens towards the eventual digitization of cash.
“Agricultural Bank has been at the forefront of launching the industry’s ATM deposit and withdrawal feature to help Shenzhen residents adapt to the digitalization of cash and explore the transformation of services,” he said.
Reports in the Shenzen Daily suggest the accelerated progress of the digital yuan pilot could indicate a large-scale rollout within the year. In December, however, the former Governor of the People’s Bank of China downplayed the idea that the digital yuan would replace international fiat currencies, adding that China has a a more cautious approach after witnessing the global backlash against Facebook’s Libra Project.
China is considered a pioneer of central bank digital currency. The digital yuan is expected to act as the cashless payment method in China ‘smart cities” the coming years.