China has made a key step forward in its ambitious push to develop a sovereign digital currency by opening its e-CNY wallet app for public download in the country’s iOS and Android app stores.
The trial version of the digital yuan application, which was previously available for download only through private links, is free of charge. But new user registrations are limited to designated Chinese cities undergoing digital yuan trials, namely Shenzhen, Suzhou, Xiongan, Chengdu, Shanghai, Hainan, Changsha, Xian, Qingdao, and Dalian, as well as venues of this year’s Winter Olympics, hosted by Beijing.
The move comes just weeks ahead of the Lunar New Year, when people in China customarily exchange monetary gifts in the form of digital “red packets”, known as lai see in Cantonese.
The digital yuan, developed by the Digital Currency Research Institute under the People’s Bank of China, is intended to replace Chinese bank notes and circulating coins.
But commercial digital payment methods such as Ant Group’s Alipay and Tencent Holdings’ WeChat Pay – both of which allow users to top up their accounts, transfer money, and make payments with QR codes or NFC just like the e-CNY app – are already highly popular, giving consumers few incentives to switch to the digital yuan.
About 140 million Chinese residents had opened a digital yuan account as of October 2021, with accumulated transactions reaching 62 billion yuan (US$9.7 billion) since launch, Mu Changchun, head of the Digital Currency Research Institute, said in November.
On the other hand, Alipay reported 1.3 billion users as of July 2020. Payments made through Alipay totalled 118 trillion yuan at the end of June of that year, according to Ant Group’s prospectus for its IPO that has since derailed.
To induce users to try the digital yuan, the Chinese authorities have been giving away electronic money through lottery schemes. In October 2020, Shenzhen released 50,000 red digital packs of 200 yuan each. Two months later, Suzhou offered a total of 20 million digital yuan for 100,000 people.
While the e-CNY wallet app is the official platform for the digital yuan – also known as Digital Currency Electronic Payment (DCEP) – the currency is also accessible through electronic wallets of:
- Industrial and Commercial Bank of China
- Agricultural Bank of China
- China Construction Bank
- Bank of China
- Bank of Communications
- Postal Savings Bank of China
- China Merchants Bank
- MYBank, backed by Ant Group
- WeBank, co-founded by Tencent
Despite strong central bank push and international attention attracted by the digital yuan, China has not announced an official timeline for the official launch of DCEP.
However, China said the digital yuan will be made available to foreign visitors without a Chinese bank account during the Winter Olympics, scheduled to start on February 4.