China continues to rollout its central bank digital currency (CBDC), which will now be available on the country’s largest messaging app, the state-run China Daily reported on 6 January.
According to the announcement, Chinese technology conglomerate Tencent has added support for the country’s digital yuan to its WeChat Pay wallet, one of mainland China most popular payment services. While the CBDC has not yet been implemented nationwide, the more than 1 billion users on WeChat will surely give it a significant boost. An analyst from consultancy firm Trivium China, Linghao Bao, said in an interview with CNBC:
“Chinese consumers are so locked in WeChat Pay and Alipay, it’s not realistic to convince them to switch to a new mobile payment app. So it makes sense for the central bank to team up with WeChat Pay and Alipay as opposed to doing it on its own.”
While not very popular outside of China, WeChat Pay — which has more than 800 million active monthly users — can be considered a “mega-app” due to the number of services wrapped into it. In order for people to use the CBDC on the app, however, they will need to first verify their identity using the digital yuan wallet app, which was launched by the People’s Bank of China (PBoC) for Android and iOS earlier this week.
China has been conducting tests for the e-CNY CBDC for almost two years now, and while we still have no confirmed date for its official launch, the country seems to be slowly rolling out the currency. Back in November, an executive of the PBoC claimed that over 140 million individuals have already created a e-CNY wallet, and that over $9.7 billion worth of transactions have been conducted using the CBDC. The Thursday announcement also revealed that the CBDC will see its biggest test to date at the Winter Olympics in Beijing.