PRC banks are gradually moving towards issuing loans to individuals and industrial enterprises in the state digital currency.
Banks in Suzhou and Shaanxi provinces, as well as the city of Guangzhou, have begun issuing digital yuan (e-CNY) loans to customers ranging from $10,363 to $222,000.
Lending in digital yuan is used in the replenishment of working capital of enterprises, financing of supply chains, cross-border settlements and mortgage lending.
“The digital yuan will allow banks to track the intended use of loan funds, and the digital form will make it easier for regulatory authorities to monitor cash flows in real time. In this way, regulators will be able to obtain the necessary information to assess the operational and payment capabilities of borrowers,” explained Liu Bin, director of the Shanghai Research Institute for Reform and Development.
In late July, Mu Changchun, chairman of the Digital Currency Research Institute at the People’s Bank of China (PBOC), said that Chinese authorities should have access to data about people and companies using the digital yuan. According to the official, this is necessary to combat money laundering and terrorist financing, as well as cases of tax evasion.
Source: Bits
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