Tencent’s WeChat Will Support China’s Central Bank Digital Currency e-CNY
China’s largest messaging app WeChat will be supporting China’s central bank digital currency (CBDC).
Tencent-owned WeChat, China’s largest messaging app and one of the country’s biggest payment services, will begin supporting the country’s sovereign digital currency – digital yuan or e-CNY.
According to a CNBC report, WeChat Pay will begin supporting digital yuan settlements. The move is expected to massively increase the number of citizens operating with e-CNY as the firm has nearly 1.2 billion active users.
WeChat’s main competitor AliPay has also set its focus towards digital yuan settlements. Last year, the firm, run by Alibaba affiliate Ant Group, began trials to explore the possible adoption.
According to Linghao Bao, Analyst at Consultancy Trivium China, commented on Chinese consumer behavior when it comes to mobile payment apps:
“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.”
The potential expansion of the Chinese CBDC usage comes less than a month before the Beijing Winter Olympics. The authorities have already announced they might allow athletes and foreign visitors to use the financial product during the sports event.
The People’s Bank of China (PBoC) has been promoting its central bank digital currency (CBDC) on numerous occasions throughout the past several months. In November 2022 the central bank announced that the number of individuals who have opened digital yuan wallets hit 140 million.
Just this week, the digital currency research institute of PBoC released the “e-CNY (Pilot Version)” app – a mobile wallet for the Chinese CBDC – on iOS and Android stores across the country. The development enabled local users to download it and conduct pilot trials of the digital yuan and its circulation services.
The initiative was first launched in the city of Shanghai, with the plan of widening the scope to other regions of China.
The institute reminded that the feature is still in a research and development mode. The “e-CNY (Pilot Version)” is only accessible to accredited users via institutions that provide digital yuan services, such as major domestic banks.
