After the pilot test, the People’s Bank of China proceeded to make significant progress with the Digital Yuan. The CBDC has passed numerous tests in the e-commerce business, including being used to pay salaries and run lotteries.
The Digital Yuan has also been put to the test in numerous Chinese provinces, and it has recently made its debut in the insurance market.
The PBOC is piloting the CBDC in Shenzhen with a local unit of China’s largest insurer, Ping An. The policy covers medical employees in Shenzhen’s Nanshan District. It provides them with various amounts of compensation in the event of a COVID-19 diagnosis or death.
Medical personnel in Shenzhen have also been urged to utilize the digital yuan wallet to pay their insurance premiums since they are given a monetary incentive.
The impact of the digital yuan test on the insurance business is significant.
The test is essential in the insurance business to broaden the usage of the CBDC beyond e-commerce and retail payments, according to Wang Peng, an assistant professor at Renmin University of China’s Gaoling School of Artificial Intelligence.
According to him, the insurance industry’s utilization proves the technology’s viability in a much broader spectrum of more sophisticated application scenarios
The CBDC’s next step in the insurance industry will be used for insurance claim payments and other insurance-related scenarios.
China is the front-runner in the CBDC race.
Since October 2020, China has been experimenting with the digital yuan. It all began in Shenzhen, where the local government and China’s central bank collaborated to distribute 50,000 digital red packets carrying 200 yuan apiece.
This was the first time CBDC has been tested in a public setting. However, there has been no turning back since, as the PBOC has promoted the adoption of digital money in many other locations.