After U.S. President Donald Trump slapped a jaw-dropping 145% tariff on Chinese goods, the yuan took a sharp dive, hitting its lowest level in 17 years at 7.3498 per dollar.
In response, China’s central bank is pushing the success story of its digital currency, aiming to show that the economy still has a few strong cards to play.
Before March 11, data from China’s central bank showed a big jump in the use of its digital currency, the e-CNY. In just nine months, the number of personal wallets grew from 180 million to 800 million, and total transactions went up by 45%, reaching 10.2 trillion yuan.
Chinese state media has been sharing these numbers everywhere — likely to boost public confidence and show strength as the economy comes under pressure.
At the same time, the U.S. has lowered tariffs for many other countries but kept high ones in place for China. That’s led Beijing to hit back with its own set of tariffs on American imports.
At the same time, the PBOC has reportedly asked banks to cut back on buying U.S. dollars. Still, the forex markets aren’t too convinced — the yuan continues to slide.
Not everyone’s convinced by China’s glowing numbers. Some economists think it’s all just PR, especially when tensions are high — the kind of moment when stats usually get dressed up.
And let’s be honest, the e-CNY isn’t without issues. Since it’s tied to people’s digital IDs, there’s growing unease that it could be used to keep tabs on how folks spend their money.
That said, China isn’t slowing down on upgrading the e-CNY. New tools like offline payments and better QR code functionality have rolled out, and more cities are allowing it for public transport.
Whether all of this is enough to offset the damage from the tariff war is still up in the air, but one thing’s for sure: China is betting big on its digital currency to steady the ship.
Also Read: Amid Trump Tariff War, China And Russia Turn To Bitcoin
