A local Chinese news outlet has reported that Tencent (owners of popular Chinese chatting app, Wechat) has announced that it will soon start supporting e-Yuan payments. The South Asia nation has been developing a national digital currency for nearly eight years, but it hasn’t been deployed.
Wechat And Alipay Crucial To E-Yuan Adoption
Once WeChat (with its over a billion users) starts supporting e-Yuan payments, it will boost the adoption of e-Yuan nationwide. Many have dubbed Wechat the “mega-app” based on the numerical strength of its users and the various services it provides. Nearly a billion users utilize Wechat pay to settle multiple bills such as food and transportation services.
A famous analyst with Trivium China, a digital consultancy firm, stated in a recent interview with CNBC that “it will be an almost impossible task for Chinese users to use another payment app aside from Wechat and Alipay. The best option is for the apex bank to liaise with Alipay and Wechat pay instead of creating its own.” As of this writing, China’s apex bank hasn’t conducted sufficient trials of the e-Yuan in commercial and consumer settings.
A Nationwide Rollout
Even though it has indicated an interest in a nationwide rollout of the currency, it has yet to release a schedule to achieve that objective. Nevertheless, if any country will issue a national digital currency, China will be the first nation to do so. China is working on implementing the e-Yuan outside consumer applications.
As Macau-based casino operators get set to renew their licenses – a first in two decades, regulators are proposing that they compel them to pay for their license renewal using digital Yuan. Also, authorities are considering a proposal to launch a Beijing exchange whose primary role is to conduct fiat to e-Yuan transactions and vice-versa.
A Well-Timed Launch
On January 5, the People’s Bank of China released a trial version of the e-Yuan wallet app for iPhone and Android smartphone users. Many financial experts have applauded the regulators over the timing of this wallet app launch since it’s coming at a time close to the lunar new year. Many Chinese often use the lunar new year digital monetary gifts, and gifts of a digital Yuan might come in order this year.
Besides the new lunar year, attendees at the upcoming Beijing Olympics can expect to perform payment settlements using the e-Yuan. Some economic experts have already touted China’s e-CNY as a better alternative to BTC. ETH and other private digital currencies because of their stability and non-volatility.
While it is impressive that nearly 145m Chinese now own a digital Yuan account, a collaboration with Alipay and Wechat will surge the number of account holders to billions. It is no wonder Yi Gang (governor of China’s apex bank) remarked that the bank would keep working with existing payment apps to expand the interoperability and use of the digital Yuan. More importantly, it will assist the bank in ways to improve its digital currency’s functionalities and design.