WeChat Pay announces support for China’s digital yuan
- By adding support for e-CNY, WeChat has exposed China’s CBDC to over 1 billion users.
- To use e-CNY, WeChat App users must complete identity verification via the e-CNY wallet.
- WeChat’s announcement comes days after PBoC launched the beta version of its e-CNY wallet.
Tencent Holdings’ WeChat App, the largest messaging app in China and one of the most popular payments in the country, has started supporting China’s central bank digital currency (CBDC). A report unveiled this news today, noting that the app’s users now have an option to pay with e-CNY (digital yuan).
According to the report, WeChat users will have to complete identity verification through the e-CNY app, a digital yuan wallet application created by the Digital Research Institute of the People’s Bank of China (PBoC). Once this function is activated, users can send, receive, or pay using e-CNY.
Through this decision, WeChat will help the Chinese government get a vast userbase for its CBDC quickly. Reportedly, WeChat App boasts a myriad of services and over 1 billion users, feats that have seen it earn the moniker mega-app. The app has over 800 million monthly active users, and exposing this population to e-CNY will see the CBDC achieve mass adoption rapidly.
If you can’t beat them, join themCopy link to section
This development comes after the PBoC launched the beta version of the e-CNY wallet earlier this week to encourage the use of the digital yuan. Although the central bank had completed numerous e-CNY trials before this launch, the CBDC had relatively low adoption, with only 140 million citizens opening a digital yuan account by October 2021.
Compared to WeChat and Alibaba’s Alipay, which had over 1.3 billion users by June 2020, the e-CNY wallet did not stand a chance.
Linghao Bao, an analyst at consultancy firm Trivium China, said,
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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.
Prepping for the Winter OlympicsCopy link to section
These efforts come ahead of the Winter Olympics, which commence on February 4 in Beijing. Although the Chinese government has not yet announced when it seeks to roll out e-CNY, it intends to expand its testing during the upcoming international multi-sport event.
Before this, a report disclosed that China was pushing McDonald’s to increase the scale of e-CNY adoption to accommodate more users during the Winter Olympics. While McDonald’s denied these claims, saying expanding its scope of e-CNY adoption was a business decision, a source familiar with the situation in China said the country was pressing other companies like Visa and Nike to do the same.