The digital yuan has been launched on WeChat, the biggest messaging app in China. This support is expected to give a big boost to the state-backed digital currency. Work on this CBDC by the People’s Bank of China has been going on since 2014.
Allowing WeChat Users to Use CBDC
The central bank of China had launched e-CNY mobile app on January 4, 2022, to facilitate digital yuan payments. Users of this app in some cities and regions of China can use this currency for payments. The launching of this currency at WeChat indicates the bank is not sure the use of CBDC can be increased only through its e-CNY app. The bank has partnered with Alipay and Wechat to increase the use of CBDC for payments. The reason behind this co-opting of these companies may lie in the assessment that Chinese consumers do not want to move away from Alipay and WeChat Pay to a new payment app.
The Giant Social Media App WeChat
This app may not be known much in other countries, but within China, it is the giant social media app. It is used not only for messaging but also for payment and many other applications. It has been declared a super app because so many services are offered through it. Wechat Pay allows users to order foods, taxis, and many other products and services.
China is trying to roll out this currency before the start of the Winter Olympic Games planned in Beijing in February 2022. The goal is to allow foreigners coming to watch the games to pay for local products and services with the digital yuan. It eliminates the need for them to open a local bank account.