On Sunday, with the launch of the first batch of digital yuan ATMs by the state-owned Agricultural Bank of China, China's efforts to develop a centrally-issued digital currency took a leap.
According to reports, customers of certain branches in the Shenzhen region have begun to spend and convert the digital yuan they received as part of China's "red envelope" lottery, which saw $3 million in new currency given to 100,000 local citizens.
As per reports, ATM enables the deposit and withdrawal of digital yuan through a smartphone application, and allows users to convert cash and savings to and from central bank digital currency.
The Agricultural Bank of China is one of China's "big four" state-owned banks, which collectively represent the world's four largest banking institutions. Zou Hua, manager of the bank’s Digital Yuan Innovation Lab, stated that the launch of ATM was part of the efforts to guide citizens to the ultimate digitization of cash.
"Agricultural Bank has taken the lead in launching the ATM cash deposit and withdrawal function in the industry to guide Shenzhen residents to adapt to the digitization of cash and explore service transformation," he said
Reports from Shenzhen Daily indicate that the accelerated development of the digital yuan pilot could indicate that there will be a large-scale deployment during the year. However, in December, the former governor of the People's Bank of China played down the idea that the digital yuan would replace international legal tender, adding that after witnessing the global pushback against Facebook's Libra project, China has adopted a more cautious approach.
China is considered a pioneer in central bank digital currencies. It is expected that in the next few years, its digital yuan will become a cashless payment method in China's "smart cities".