WeChat, China’s leading social networking and payment app, has added the country’s central bank digital currency, or CBDC, to its payment services, according to the CBDC’s payment app and a China media report. The move may help broaden the appeal of the digital yuan that so far has had a slow start.
See related article: China’s digital yuan needs WeChat, Alipay to boost adoption, experts say
Fast facts
- WeChat Pay, run by Tencent Holdings and with more than 1 billion monthly active users, follows rival Alipay owned by Alibaba Group in offering support for the digital yuan.
- WeChat Pay now allows digital yuan payments on certain apps, such as ordering food from McDonald’s and paying bills.
- Direct CBDC transactions between WeChat users are expected to follow.
- Alipay, China’s largest third-party payment platform controlled by Alibaba unit Ant Group, started to accept digital yuan payments in December 2022, allowing its users to pay with digital yuan on Taobao, China’s leading online shopping platform, along with multiple other e-commerce apps.
- The digital yuan, also known as the e-CNY, is being piloted in at least 26 Chinese provinces and cities. The token saw a jump in transaction volumes on Chinese e-commerce platforms during the 2023 Lunar New Year shopping season, helped by e-CNY handouts from the authorities.
- However, China’s CBDC still faces challenges in attracting consumers and analysts have previously said it would need to be adopted by China’s payment platform giants – WeChat and Alipay – to boost adoption rates.
- The CBDC is among topics under discussion at the on-going Two Sessions or parliamentary meetings in China. Fu Xiguo, an official at China’s central bank and member of the National People’s Congress, proposed giving the digital yuan the same legal status as the physical yuan, according to a local media report on Sunday.
See related article: Digital yuan sales during Lunar New Year up from last year, online retailers say