(Yicai) July 24 -- China's e-yuan is showing its edge as members of a gym chain in Qingdao recently managed to get refunds when the business wound up.

Prepaid subscriptions were returned in digital yuan to members of a large gym chain in Shandong province after local outlets were suspended late last month due to a broken capital chain, Yicai learned. E-yuan is a digital currency developed by the People's Bank of China, the central bank.

One customer of the gym whose surname is Wang said to Yicai that he recovered all the unused prepayments on July 5, less than a week after troubles became evident at the gym.

"This experience really surprised me," Wang said. "It is because I had a similar experience with another merchant that also went bankrupt after I bought a membership so I know it would be quite difficult to refund the prepayments in these types of circumstances."

Wang had paid the gym subscription through Zhijin Weishi, a service platform which manages e-yuan payments. Zhijin Weishi belongs to a commercial bank in which Wang has an account.

In fact, under this arrangement, prepaid funds are accessible to only the account owner before the actual consumption so service platforms that supervise e-yuan payments can ensure that the security of funds will not be impacted by the merchant’s financial status, said an official at the central bank's digital currency institute that developed an underlying system for platforms such as Zhijin Weishi. The increased transparency and tamper-proof capabilities should also add trust between consumers and merchants, the official added. 

The application of the PBOC's e-yuan system along with Zhijin Weishi can ensure the safety of prepayments so consumers no longer need to worry about their unused funds being misappropriated by the merchant or third parties, said Zhu Feng, deputy general manager of the digital yuan division at the Postal Savings Bank of China. 

At the same time, the system also provides regulators with a sound technology tool to monitor the flow of funds, Zhu added. 

Editors: Tang Shihua, Emmi Laine