Former Chinese Central Banker Complains About Low Digital Yuan Adoption
According to reports, a former executive at China’s central bank, the People’s Bank of China (PBoC), unveiled a hidden truth about China’s CBDC, the digital Yuan. Contrary to popular belief, the official noted that the country’s CBDC had recorded low adoption.
Former PBoC Complains About Poor Digital Yuan Usage
On December 28th, a local news media, Caixin, reported about China’s CBDC usage. According to the report, Xie Ping, an ex-research director at the PBoC, stated that e-CNY transactions passed $14 billion (100 billion Yuan) two months ago.
Meanwhile, Ping, a finance professor at the University of Tsinghua, made the recent comments while speaking at a university conference. Despite the nation’s rapid expansion efforts to attract people, only a few individuals have an e-CNY wallet.
A PBoC report for January revealed that only 261 million users have an e-CNY wallet. It is low compared to the total number of persons using mobile payments in the country.
According to a report by China UnionPay, in 2021, there were over 903.6 million mobile payment users in China. Also, the former PBoC staff argued that China must change the use case of the e-CNY.
Currently, the country is using the CBDC as a substitute for paper notes. However, Ping stated that there are other use cases the government can adopt.
It includes connections to payment platforms and payment for financial products. The professor believed that expanding the CBDC’s usage would drive adoption.
Also, he compared the digital Yuan with many other payment systems in China, like QQ Wallet, Alipay, and WeChat Pay. These payment systems allow users to invest and borrow loans.
According to him, these companies created a market structure that solved the needs of individuals. Some third-party payment applications are compatible with the e-CNY. However, only a few people use them.
China Adds New Features To e-CNY Wallet
According to Ping, users are already familiar with current similar services. Hence, moving them to the new payment system would not be easy.
Meanwhile, it is rare for former Chinese government officials to criticize the country’s initiatives. Hence, this report could mean that China is struggling to increase its CBDC usage.
Moreover, the Chinese government has taken several steps to increase e-CNY adoption. For instance, the country launched the digital Yuan during the 2022 Beijing Olympics to increase its usage.
Notably, the country expanded e-CNY usage to four additional cities in December. Earlier in September, the government had extended the national digital currency’s availability to Guangdong and three other cities.
Furthermore, China has added new features to its e-CNY wallet application. The aim is to entice more users before the Chinese New Year.
The new functionality allows users to send digital models of conventional red envelopes or money packets to friends and families. It is a popular custom that most people practice during festive seasons.
Apart from CBDC development, China is also making headlines in blockchain development.
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