China Municipal Bank issues first-ever digital yuan loan using intellectual property as collateral

As reported by local news bulletin Sohu, on Wednesday the Agricultural Commerce Bank of Zhangjiagang, located in China’s Suzhou province, announced that it had issued a 500,000 digital yuan (e-CNY) loan with intellectual property backing it as collateral. The loan was issued through unanimous approval by the city’s consumer markets regulator, financial markets regulator and municipal officials.

The loan recipient, unnamed in the report, is an enterprise manufacturing environmental protection equipment for steel mills in Suzhou Province. As the organization said, due to an increase in the number of customer invoices, it decided to experiment with the new lending method, where the loan was directly released to its e-CNY digital wallet. Meanwhile, the Agricultural Commerce Bank of Zhangjiagang said it was another experiment in the country’s e-CNY trial program.

Two days earlier, the People’s Bank of China said it wanted to further expand the number of e-CNY testing sites, which are currently in 15 provinces. In its latest data update on May 31, the central bank reported 264 million e-CNY transactions totaling CNY 83 billion ($12.29 billion) since its inception. Over 4.567 million merchant terminals in China accept e-CNY as payment.

Related: More than 2.6 Million Users Sign Up for Shenzhen City’s Digital Yuan Airdrop

In addition, 64 companies with a total market capitalization of CNY 560 billion ($82.9 billion) listed on the Shanghai and Shenzhen stock exchanges are exploring blockchain technology. In recent months, China appears to have increased its focus on developing its central bank digital currency, citing the benefits of boosting consumer spending after the COVID-19 lockdown crippled the economy. Various e-CNY airdrops are currently taking place for participants to claim rewards and redeem them on various merchant platforms.

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