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The Agricultural Commerce Bank of Zhangjiagang issued the first e-CNY loan of $75,000 keeping an intellectual property as collateral.
On Wednesday, August 4, the Agricultural Commerce Bank of Zhangjiagang, announced its decision to issue a 500,000 digital yuan (e-CNY) loan. This roughly translates to $75,000 in loan value.
First Digital Yuan (e-CNY) Loan
Although the loan amount seems less, the interesting part is that the bank has accepted intellectual property as collateral for the loan. As reported by local news publication Sohu, the bank issued the loan after unanimous approval by the city’s financial markets regulator, consumer markets regulator, and municipal officials. The Sohu report notes:
“This is the first intellectual property pledge loan in the country issued by the bank since the establishment of the Digital RMB Application Research Center. The successful issuance of this loan further realizes the application of digital RMB in credit scenarios”.
Also, the bank has kept the name of the lean seeker under wraps. But some details tell that it is an entity manufacturing environmental protection equipment for steel factories operating in Suzhou province. As per Sohu, the entity saw a significant uptick in the number of client invoices. Thus, it decided to experiment with the new borrowing method. The bank then directly released the load to the entity’s e-CNY digital wallet. The Agricultural Commerce Bank of Zhangjiagang called it yet another experiment in the country’s e-CNY trial program.
Expand the e-CNY Testing Program
Two days earlier, the Chinese central bank said that it is working to further expand its digital yuan (e-CNY) testing sites. Currently, the People’s Bank of China (PBoC) is testing e-CNY in 15 different provinces.
During its last data upgrade on May 31, the central bank said that it has successfully conducted 264 million e-CNY transactions totaling 83 billion CNY ($12.29 billion) since the beginning. On the other hand, nearly 4.567 million merchant terminals across China accept Digital Yuan as payment.
Furthermore, the PBoC noted that the country’s digital currency sector is at a high stage of priority. Currently, there are 64 companies involved in China’s digital currency sector having a total value of more than 560 billion Yuan. The Chinese central bank notes:
“Looking further, the current valuation is less than 30 times, underperforming the Shanghai Composite Index (-12.46%) during the year, and there are only 5 digital currency concept stocks that the agency predicts that the net profit will increase by more than 20% in 2022 and 2023”.
As China looks to dominate the world economy, it is putting greater focus on its central bank’s digital currency. PBoC has also conducted several e-CNY airdrops and incentivized participants through rewards for using e-CNY at different merchant locations.