China digital currency: Alipay gives e-CNY a lift by offering it as express payment option on Alibaba’s e-commerce platforms

China’s sovereign digital currency has been embedded into Alipay, the popular digital wallet run by Ant Group, to facilitate “express payments” on the Taobao and Tmall e-commerce sites operated by Alibaba Group Holding, according to Li Chen, Ant’s chief compliance officer.

The digital currency, known as e-CNY, is only available for users in about two dozen cities in China as part of a trial programme, as the central bank struggles to convince consumers to use it.

After enabling the feature via the official e-CNY app, users can pay for orders on Taobao, Tmall and other Alibaba Group platforms like food delivery site Ele.me and grocery store Freshippo, with Alipay using the digital yuan.

Ant, which is affiliated with Alibaba, owner of the South China Morning Post, is undergoing a business restructuring to comply with regulations imposed by China’s central bank, which set up an agency called the Digital Currency Institute to oversee e-CNY development.

Alipay’s adoption of e-CNY as an express payment option follows the addition of an e-CNY channel on the app in January. In order to pay with digital yuan until now, users needed to activate the channel each time as it was not connected with popular sites like Taobao.

Alipay had more than 1 billion annual active users in the 12 months ended August 17, 2020, according to its prospectus. Alibaba’s online retail businesses had 903 million active users in China for the year ended March 2022.

Officials from the People’s Bank of China have repeatedly argued that e-CNY does not compete against payment services such as Alipay and WeChat Pay, operated by Tencent Holdings. But as far as the general public are concerned, e-CNY, as well as payment functions included in apps offered by traditional banks, are viewed as other forms of mobile payments.