Tag: digitalyuan

WeChat Offers Digital Yuan Payments Ahead of Beijing Winter Games

WeChat has become compatible with payments using the digital yuan ahead of the Beijing Winter Olympics, owner Tencent Holdings said.

The move by Tencent comes at a time when the Chinese government plans to test its digital yuan around Olympic venues next month when the Games begin.

From the perspective of Tencent, whose business strategy revolves around WeChat, the move is a strategy to prevent a loss of users from the app.

To use the payment feature on WeChat, a user must download the People’s Bank of China’s e-CNY app and create a digital yuan wallet with WeBank – the virtual bank backed by Tencent, followed by linking the WeBank wallet to the WeChat account to initiate payments.

Whether the central bank’s digital yuan will compete, or coexist, with other smartphone payment platforms is yet to be seen.

The world’s largest chat app has about 1.2 billion users, mainly in China. Currently, China’s digital yuan is limited to a few local cities, and only a handful of businesses accept the currency.

According to a January 5, 2021, report by Blockchain.News, the People’s Bank of China (PBoC) extended its pilot tests for the digital yuan to launch a new mobile wallet. The new wallet is available to a select few as it is still in the development phase.

The report stated that the new mobile wallet is notably available on the Google Play Store and the Chinese-supported App Store for iOS users.

Along with WeChat, the government also plans to turn Macau into a testbed for the digital yuan as casino owners prepare to bid for new licenses in the city for the first time in two decades.

China Expands Digital Yuan Pilot Sites to 23 regions across 15 Provinces

The People’s Bank of China(PBoC) announced that it would expand the digital yuan pilot program from 11 regions to 23 regions in 15 provinces and cities.

Per the data released by Zou Lan, director of the Financial Markets Department of the People’s Bank of China, shows that the total transaction volume of digital yuan (e-CNY) in the pilot areas of 15 provinces and cities has reached 83 billion yuan ($12.315 billion) as of May 31. 

The use of digital yuan (e-CNY) is growing rapidly. According to the data released by the People’s Bank of China, it also shows that the number of merchant stores using digital renminbi payments has reached 4.567 million. This data result is attributed to the successful appearance of the digital renminbi as a technology business card to the public during the Beijing Winter Olympics.

The new digital renminbi wallet launched by the People’s Bank of China is available on the Google Play Store and the Apple App Store, which is accessible to users in mainland China. 

While the transaction volume is remarkable, it is nowhere near that of Alipay, one of China’s two major payment service providers. Alipay’s monthly active users are 711 million, far exceeding the 261 million announced by the People’s Bank of China. Alipay has more than 80 million registered merchants, while fewer than 10 million merchants have digital RMB wallets.

The use of China’s Central Bank Digital Currency (CBDC) is currently being boosted by the city of Shenzhen, which according to reports, has airdropped 30 million Digital Yuan (e-CNY) to its residents.

Zou said that the pilot test of digital CNYi will be steadily promoted, the pilot test will be expanded steadily and the number of e-CNY test sites will be increased and its technical capabilities will be improved.

While competition from private cryptocurrencies like bitcoin and stablecoins disappeared when the state banned cryptocurrencies last year, China’s central bank needs a more tenacious strategy to get more users to use the e-CNY.

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