Digital currency Adoption trends in China in 2023
own digital currency
It is estimated that over 78 million people, 5.5% of China’s total population, currently own digital currency.(¹)
While the Chinese government has been cautious about digital currencies and has implemented strict regulations on digital currencies-related activities, it has recognized the potential of blockchain technology.
It has been actively exploring its use in various industries. China has the most blockchain patent applications of any country, accounting for 84 percent of the world’s total, signaling Beijing’s continued commitment to the technology despite years of crackdowns and a ban on digital currency. (2) China encourages blockchain development (3), even if it does not like the digital currencies that run on top of them.
China is one of the frontrunners in the development and adoption of Central Bank Digital Currencies (CBDCs). The People’s Bank of China has been actively working on its digital currency, known as the digital yuan or e-CNY, and is looking to expand its usage among the citizens of the country. The partnership between the People’s Bank of China and Tencent-owned WeChat (4), China’s largest messaging app and one of the country’s biggest payment services, is a significant step forward in achieving this goal. With over 1 billion users, the integration of the digital yuan into WeChat has the potential to provide a massive boost to the adoption and usage of digital currency. This move serves to increase the usage of digital currency and reinforce China’s position as a leader in the CBDC space.
Despite the regulatory challenges, the overall sentiment towards digital currencies in China is positive, with many industry experts and investors viewing digital currencies as a valuable addition to the financial ecosystem. The country’s tech-savvy population and the large pool of skilled blockchain developers also make it an attractive market for digital currencies and blockchain-related ventures.
Our projections regarding digital currencies ownership in China are primarily based on the report “The Chainalysis 2022 Geography of Digital currency Report.” This report ranks countries based on five factors:
Given the limited availability of data due to the Chinese government’s crackdown on digital currency activity and trading, our estimations are derived from China’s Chainalysis score and data findings from relevant reports.
It’s important to note that due to the challenges presented by restricted data access and the evolving regulatory landscape, our estimations are based on available metrics and correlations to offer insights into China’s digital currencies ownership.