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China digital currency
TechTech Trends

China’s digital currency: e-CNY wallet nearly doubles user base in two months to 261 million ahead of Winter Olympics

  • The e-CNY app had been used in transactions totalling US$13.8 billion by the end of December as the central bank pushed adoption of its digital currency
  • The currency has no official nationwide launch date, but is being trialled in several cities and at Winter Olympics venues

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The e-CNY app seen in Apple’s App Store atop a yuan banknote on January 6, 2022. Photo: EPA-EFE
Coco Feng
China’s official digital yuan app, e-CNY, had 261 million unique users at the end of 2021, nearly twice what it had in October, even before it was released in app stores this month, according to a central bank official.

The digital yuan, officially known as the Digital Currency Electronic Payment, was also being accepted by more than 8 million merchants by the end of December, and had been used in transactions totalling 87.6 billion yuan (US$13.8 billion), Zou Lan, head of financial markets at the People’s Bank of China (PBOC), said at a press conference on Tuesday.

The rapid growth of e-CNY is part of the central bank’s aggressive push to boost adoption of the country’s central bank digital currency (CBDC), which is being trialled in at least 11 cities. In October, the app had just 140 million individual digital yuan accounts and 10 million corporate accounts, Mu Changchun, head of the PBOC’s Digital Currency Research Institute, the unit in charge of the digital yuan, said in November.

The proliferation of the sovereign digital currency in China, which strictly bans the use of cryptocurrencies such as bitcoin, comes ahead of the 2022 Beijing Winter Olympics and the Lunar New Year holiday, which both start the first week of February. It also comes as Ant Group’s Alipay and Tencent Holdings’ WeChat Pay, the country’s two dominant mobile payment services, face increased regulatory oversight. Ant is the fintech affiliate of Alibaba Group Holding, the owner of South China Morning Post.

Both these apps also offer payments in digital yuan, but users must first have the e-CNY app to transfer the currency into their digital wallets for Ant’s MyBank or Tencent’s WeBank.

Many governments around the world are exploring their own CBDCs, but China is the first to roll one out on such a large scale. It could prove to be a trailblazing decision. Agustín Carstens, general manager at the Bank for International Settlements, said in a speech this week that central banks, not technology companies, are the best institutions to provide trust in money in the digital age.

The State Council, China’s cabinet, said in a policy blueprint earlier this month that it would encourage the use of digital yuan. At the Tuesday press conference, Zou said the PBOC would promote its use in retail transactions, utility payments, and administrative services.
Since launching in Apple’s App Store and multiple Chinese app stores for Android on January 4, e-CNY has become one of the most downloaded apps in the country. It topped Apple’s and Xiaomi’s app stores within the first week.
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