• The services of the largest Chinese messaging service, which has over one billion users, will include the digital Yuan.
• China desires its digital currency, the CBDC (Chinese Bitcoin Currency), to circulate throughout its country prior to the Winter Olympics celebrations in Beijing.
• The mobile payment apps WeChat and Alipay assure the People’s Bank of China of an early implementation of the digital currency throughout the country.

With the addition of WEChat, China’s largest payment services and messaging app, the government hopes to accelerate the adoption of the digital yuan across the country. If Chinese consumers start using Tencent’s application to make payments, the digital currency will take a big boost and its use may become widespread.

The Chinese authorities are working since 2014 to develop the digital currency (e-CNY) but it has yet not been fully implemented in the country. It is possible that the digital currency might become widespread thanks to WeChat which has more than one billion users.

WeChat is primarily used in China but it is important for the Asian giant to increase the usage of the digital currency. China’s plan is to create a strong economy that will be primarily fueled by Chinese customers. China hopes to lessen its dependence upon the Western market by doing this.

The so-called “super application” offering multiple services has deep roots in China; not only for its messaging functions but also for its massive use to make payments through WeChat Pay, order taxis, and buy food with home delivery.

WeChat Pay, WeChat’s digital wallet and mobile payment service with more than 800 million active users each month, enables Chinese consumers to pay for sundries using their phones. It issues a barcode, which is used in both physical and online stores.

The Flipside

• The incorporation of WeChat is part of a testing process with the digital yuan that the People’s Bank of China (PBOC) has been carrying out.
• Only a handful of cities have so far been chosen for this central bank currency (CNCB) largely through national lotteries.
• Selected cities include Shenzhen, Suzhou, Chengdu, and the capital Beijing, where the People’s Bank of China has awarded some residents with prizes of up to 200 digital yuan to spend as they please.

These movements show that China’s issuing bank wants to expand its digital currency across the nation. Even though a date is not set yet for the nationwide implementation of digital currency,

With the release of the app to allow digital payments, all citizens in 10 geographic regions will now be able use the digital Yuan. Download the app to register for the digital currency. Before the app was made available only to those users who were invited.

Why you should care

• Ant Group runs the Chinese apps WeChat, Alipay and other services. Alibaba (NYSE:) subsidiary, dominate mobile payment services.
• Alipay started testing digital Yuan payments last year. The digital Yuan will be used by both applications in competition.
• China wants its digital currency well-proven during this year’s Beijing Winter Olympics.

The PBOC has added e-CNY, WeChat and Alipay to ensure that most Chinese will soon be able to use its digital currency.

“Chinese consumers are so caught up in WeChat Pay and Alipay that it is unrealistic to convince them to switch to a new mobile payment app,” an analyst at consultancy Trivium China, Linghao Bao, told CNBC.

“So it makes sense for the central bank to partner with WeChat Pay and Alipay rather than alone,” he added.

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