(Bloomberg) -- China’s digital yuan has had a very small impact on the financial sector so far, according to the central bank’s head of its digital currency unit.

The balance in e-CNY wallets is about 470 million yuan ($73.9 million), compared with M0 money supply, which refers to cash in circulation, of 8.6 trillion yuan, Mu Changchun, head of the Digital Currency Institute at the People’s Bank of China, said in an online forum hosted by the Atlantic Council.

There’s no negative impact to the financial system so far, Mu said, adding that he doesn’t expect the e-CNY will have a significant “negative disintermediation effect” in the sector. The digital yuan will also further enhance financial inclusion, he said.

Other highlights of his speech:

  • E-CNY makes financial services more accessible to people in remote areas, and allows foreign visitors who don’t have bank accounts to enjoy the benefit of mobile payment
  • E-CNY is designed to pay no interest, to reduce competition with bank deposits
  • The e-CNY adopts a two-tier system, meaning the PBOC first issues e-CNY to commercial banks, which then distribute it to the public. This design helps keep commercial banks in the loop
  • Have to strike a balance between anonymity and combating criminal activities
  • There are four tiers of e-CNY wallets, each with different levels of anonymity and balance limits
  • China’s personal information protection law stipulates that telecommunication networks cannot provide users’ identities to third parties, so the wallets opened with only mobile numbers are anonymous to the PBOC
  • Will continue to advance e-CNY pilots with no timetable for official launch, and users only account for a small percentage of the population so far compared with other payment platforms
  • PBOC proposed three principles for cross-border use of central bank digital currencies: no disruption, compliance, interoperability
  • For future cross-border transaction, all e-CNY will be converted to foreign currencies before being sent to a foreign country, to minimize risks such as currency substitution

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