China woos new digital yuan users in major push ahead of Lunar New Year, Winter Olympics
- A new policy plan by China’s State Council encourages the wider adoption of e-CNY
- WeChat Pay and JD.com now include the digital yuan as a payment option
China has made a fresh push this week to convince consumers to try out the digital yuan, with the country’s top government body endorsing the wider use of the electronic currency in various scenarios.
The State Council, China’s Cabinet, said in a policy blueprint released on Thursday that it would encourage the use of e-CNY in retail transactions, utility bill payments, and the administrative service.
How close is China to launching its digital currency?
While electronic payments are currently dominated by commercial solutions, Tencent Holdings’ WeChat Pay has recently started giving users the option to pay by the digital yuan, while Alipay has included the function since last year. (Alipay is operated by Ant Group, a fintech affiliate of Alibaba Group Holding, owner of the South China Morning Post.)
On Friday, JD.com also said it would support e-CNY payments for purchases made on its main online shopping platform in stores run by the e-commerce company, as well those operated by third-party merchants on its budget shopping app Jingxi.
This comes after the digital yuan’s developer – the Digital Currency Research Institute under the People’s Bank of China – made its official e-CNY app available for public download on iOS and Android app stores in the country.
The e-CNY wallet is also accessible through the electronic wallets of seven other major domestic banks, namely the Industrial and Commercial Bank of China, Agricultural Bank of China, China Construction Bank, Bank of China, Bank of Communications, Postal Savings Bank of China and China Merchants Bank.
China’s strengthened efforts to promote its digital currency come just weeks before the festive Lunar New Year, which begins on February 1, and the Winter Olympics hosted by Beijing, scheduled to start on February 4.
During the Lunar New Year holiday, people in mainland China customarily send monetary gifts known as “red packets” using payment apps. Meanwhile, the central bank has said earlier that foreign visitors would be able to use the digital yuan at Olympics venues – even without a Chinese bank account.
About 140 million Chinese residents had opened a digital yuan account as of October 2021, with accumulated transactions reaching 62 billion yuan (US$9.7 billion) since launch, Mu Changchun, head of the Digital Currency Research Institute, said in November.
While the number of e-CNY users is significantly fewer than those of WeChat Pay and Alipay, which have about 1.2 billion and 700 million monthly active users, respectively, some consumers reacted positively to the public launch of the e-CNY app.
“I just tried the digital yuan app, and it’s very easy to use,” a Weibo user wrote on Thursday. “Although its features aren’t as comprehensive as Alipay at the present stage, it will definitely be a landmark scientific and technological achievement in the future. The digital yuan era has come.”
Other internet users were more sceptical. Online influencer “Flypig” asked its 1.5 million Weibo followers this week, “Please tell me: under what circumstances do consumers need to use the digital yuan?”
The ensuing discussions, which attracted hundreds of people, drew answers such as “when there are discounts”. Another user said he had yet to use the 25 digital yuan he was given during a bus ride.
06:54
Is cryptocurrency too risky for China?
At present, use of the e-CNY app is limited to designated cities where digital yuan trials are taking place, including Shenzhen, Suzhou, Xiongan, Chengdu, Shanghai, Hainan, Changsha, Xian, Qingdao, and Dalian, as well as Winter Olympics venues.
However, China has yet to announce a formal timetable for the nationwide launch of its digital fiat money, officially known as Digital Currency Electronic Payment.
