China’s leading messaging app – WeChat Pay – would start supporting e-CNY. The app has more than one billion users, which means the initiative could significantly increase the distribution of the digital yuan.
WeChat Adopts Digital Yuan Payments
According to a recent CNBC report, WeChat Pay – a multi-purpose messaging and mobile payment app – will begin supporting digital yuan settlements. The company’s move is expected to rapidly increase the number of citizens operating with e-CNY as the firm has nearly 1.2 billion active users.
Alipay – WeChat’s main competitor in China – has also focused on digital yuan settlements. Last year, the company, led by Ant Group, a subsidiary of Alibaba, began trials to explore possible adoption.
Speaking on the matter, Linghao Bao – Analyst at Consultancy Trivium China – opined that Chinese consumers are so committed to the two companies that they can’t be convinced to switch to a new mobile payment app.
“So it makes sense for the central bank to partner with WeChat Pay and Alipay rather than doing it alone,” he concluded.
The potential expansion of the Chinese CBDC usage comes a few weeks before the start of the Beijing Winter Olympics. The authorities have already announced they might allow athletes and foreign visitors to use the financial product during the sports event.
China’s previous CBDC surge
The People’s Bank of China has attempted to promote its central bank digital currency (CBDC) on several occasions in recent months. Following these efforts, the institution informed last November that the number of people who opened digital wallets in yuan reached 140 million.
Earlier this week, the digital currency research institute of PBoC released the “e-CNY (Pilot Version)” app – a mobile wallet for the Chinese CBDC – on iOS and Android stores across the country. The development enabled local users to download it and conduct pilot trials of the digital yuan and its circulation services.
The initiative was first available in Shanghai, then spread to other parts of the most populous country.
The institute reminded that the feature is still in a research and development mode. The “e-CNY (Pilot Version)” is only accessible to accredited users via institutions that provide digital yuan services, such as major domestic banks.
