Chinese tech giant Tencent’s messaging and payment app WeChat is bringing support for digital yuan to its more than a billion users, local news outlet China Daily reported Thursday.
On January 6, Tencent announced that its WeChat application, a “super app” that features messaging, payments, food delivery, and ride railing services, will now start accepting payments in Digital Yuan. Digital Yuan is the Central Bank Digital Currency issued and developed by the country’s central bank.
People’s Bank of China had been developing the currency since 2014 and finally launched a series of pilot projects in 2020. While the digital currency is yet to be released for a nationwide rollout, the announcement by Tencent has indicated POBC’s plan for broader use case strategies.
Linghao Bao, an analyst at consultancy firm Trivium China, told 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.”
However, WeChat’s users are required to register with the Digital Yuan wallet app to access the new service. On January 4, the central bank announced that it has launched the pilot program for the e-CNY wallet app on Apple and Google app stores. The app has been launched in 10 of the major cities in China, including Beijing, Shanghai, and Shenzhen.
The wallet has been released ahead of the country’s winter Olympics 2022 in an attempt to test its wider use case. However, the use of the digital yuan at the Winter Olympics has been criticized by foreign countries.
In July 2021, three US lawmakers announced their intention to oppose the use of digital RMB by American athletes, warning of “many problematic privacy implications”.