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
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.
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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.
For now, though, use of the digital currency is limited to designated cities, including Shenzhen, Suzhou, Xiongan, Chengdu, Shanghai, Hainan, Changsha, Xian, Qingdao, Dalian, and Beijing, which includes Winter Olympics venues.
An increasing number of places in the city now support e-CNY payments, including buses, subway stations, the Wumart supermarket chain, and certain merchants at tourist spots such as the Forbidden City, Old Summer Palace, and Badaling, the most-visited portion of the Great Wall.
At the same time, use of e-CNY lags far behind Alipay and WeChat Pay, which together control over 90 per cent of the mobile payments market.
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Two cashiers at a Wumart store in eastern Beijing told the Post on Wednesday that “not many” customers have chosen to pay with digital yuan. Those who use e-CNY often do so because they have vouchers, given as subsidies by banks and merchants to encourage use of digital yuan.
In the push to promote e-CNY, multiple participating cities have given away the electronic cash through lotteries.
However, China has yet to announce a formal timetable for the nationwide launch of its digital fiat money.