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 issuance and business operation framework, key technologies, circulation environment and international practices on digital fiat currency. As a result, the theory of digital fiat currency for the initial stage took shape. In 2016, the PBOC built the concept prototype of China's first-generation digital fiat currency, established the Digital Currency Institute (DCI), and proposed the top-level designs and fundamental features of e-CNY, including the two-tier operational system, substitute for M0, loosely coupled with bank accounts, and managed anonymity.

Under this framework and approved by the State Council, the PBOC started the e-CNY R&D project at the end of 2017. Large commercial banks, telecom operators and Internet companies with high rankings in asset size and market share and strengths in technology development were selected to participate in this project. With long-term and evolutionary vision embedded in the process of top-level designs and R&D, the PBOC and participating institutions developed and improved e-CNY apps through three phases, i.e., development and testing, internal verification, and managed external pilot. The PBOC has developed three main functions of e-CNY, which are exchange and circulation management, interoperability and wallet ecosystem. In the meantime, based on the e-CNY R&D framework, the PBOC has built a relatively complete standard system, covering general requirements, business operation, interoperability, wallet, security and regulation.

Following the principle of being steady, secure, managed, innovative and practical, the PBOC has launched e-CNY pilots in Shenzhen, Suzhou, Xiong'an, Chengdu and scenarios in the 2022 Beijing Winter Olympics since the end of 2019. The pilot runs were designed to test the reliability of theories, the stability of systems, the usability of functions, the convenience of processes, the applicability of scenarios and the controllability of risks. Starting from November 2020, Shanghai, Hainan, Changsha, Xi'an, Qingdao and Dalian joined in the pilot. The selection of pilot places for e-CNY R&D project takes into account factors such as major national development strategies, coordinated regional development strategies, as well as city-specific industrial and economic features. The pilot program now spans the Yangtze River Delta, the Pearl River Delta, the Beijing-Tianjin-Hebei region, and China's central, western, northeastern and northwestern regions. A wide range of pilot places is conducive to testing and assessing the application of e-CNY in different parts of China.

As of June 30, 2021, e-CNY has been applied in over 1.32 million scenarios, covering utility payment, catering service, transportation, shopping, and government services. More than 20.87 million personal wallets and over 3.51 million corporate wallets had been opened, with transaction volume totaling 70.75 million and transaction value approximating RMB34.5 billion. Supported by local governments, some cities distributed red packets of e-CNY to consumers. While some pilot tests involved real users and were conducted under different scenarios, large-scale tests were also arranged in batches. The pilot program tested the business and technological designs as well as whether the e-CNY system is stable, the product is user-friendly and the