The move aims to help broaden the appeal of the digital yuan. WeChat now supports the fast payment function of the digital yuan wallet, making it the second payment platform to do so after Alipay.
This feature allows users to use the digital yuan for payments on certain WeChat mini-programs and other platforms. The pilot version of the digital yuan application’s ‘Wallet Quick Payment Management’ page currently lists 94 merchant platforms that can be accessed, now including WeChat. WeChat Pay now allows digital yuan payments on certain apps, such as ordering food from McDonald’s and paying bills.
Users must authorise the CBDC wallet operator to sync their WeChat-bound mobile phone number for successful activation of the WeChat payment wallet fast payment function. Once activated, payments to digital yuan-supporting merchants can be made through the app. Additional integrations are expected to become available gradually.
As Linghao Bao, an analyst at Trivium China, a strategic advisory firm sees it, Chinese consumers are locked in WeChat Pay and Alipay. As such, it’s not realistic to convince them to switch to a new mobile payment app. Thus, it makes sense for the central bank to team up with WeChat Pay and Alipay as opposed to doing it on its own.
The digital yuan, also known as the e-CNY, is being piloted in at least 26 Chinese provinces and cities. The token saw a jump in transaction volumes on Chinese ecommerce platforms during the 2023 Lunar New Year shopping season, helped by e-CNY handouts from authorities.
In December 2022, Alipay announced its access to the digital yuan acceptance network, allowing users to spend digital yuan consumption on platforms served by Alipay, including Taobao, Shanghai Bus, Ele.me, Youbao, Tmall Supermarket and Hema.
At the start of the year, in January 2023, The People’s Bank of China (PBC) included the digital yuan in its currency circulation report. As per the bank’s 2022 financial statics report, as of December 2022, there were 13.61 billion e-CNY in circulation, worth a roughly USD 2 billion at the time. In December, the currency in circulation registered an increase at a rate of 15.3%, with the broad money supply having been reported to be 266.43 trillion CNY.
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