WeChat, one of the most popular social media and payment platforms in China has taken a stride towards digital currency adoption by incorporating China’s central bank digital currency (CBDC), known as the digital yuan, into its payment app, following in the footsteps of Alipay.
The move is aimed at increasing the popularity of the digital yuan among Chinese consumers.
The fast payment function of the digital yuan wallet is now supported by WeChat, allowing users to make payments on certain WeChat mini-programs and services, such as ordering food from McDonald’s, paying bills and more.
To activate the fast payment function of the digital yuan wallet on WeChat, users must give authorization to the digital yuan wallet operator to sync their WeChat-bound mobile phone number.
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Once activated, users can make payments to merchants that support the digital yuan through the WeChat app. It is expected that more integrations will gradually become available in the future.
Linghao Bao, an analyst at Trivium China, said, "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."
At present, the e-CNY, also known as the digital yuan, is being tested in over 26 Chinese provinces and cities. During the Lunar New Year shopping season in 2023, the digital yuan experienced a notable increase in transaction volumes on Chinese e-commerce platforms, partly due to e-CNY handouts provided by the authorities.
In December 2022, Alipay revealed that it had gained access to the digital yuan acceptance network. This access permits Alipay users to spend digital yuan on various platforms served by the payment service, including Shanghai Bus, Taobao, Youbao, Ele.me, Tmall Supermarket, and Hema.
The integration of digital yuan into payment platforms like WeChat and Alipay could boost the adoption of CBDCs in China, given the popularity of these platforms among consumers.
As digital currencies continue to gain traction globally, it will be interesting to see how other countries and payment platforms respond to this growing trend.
