China’s central bank has released a wallet app for payments and money transfers using the digital yuan earlier this month. Although the e-CNY wallet was the most downloaded app in January, but according to a Reuters report the actual use in transactions has been far less impressive.
The report attributes this paradox to the fact that access to e-CNY wallet is still limited to 10 major “pilot” cities, including Shenzhen, Beijing and Shanghai. Additionally, the actual use rate was hampered by mainlanders’ preference for Ant Group’s Alipay and Tencent’s WeChat Pay, which dominate China’s online payments.
Downloads of the digital yuan app, however, exceeded those of super payment apps, just a few days after landing in app stores. It maintained the top spot for five consecutive days after the rollout on January 8, and has been downloaded more than 2.5 million times.
While the e-CNY can be used on mobile payment apps like Alipay and WeChat Pay, the dedicated app has maintained momentum ahead of the Winter Olympics with discounts and red packets
The distribution of e-CNY takes place through a two-tier system that transfers the digital currency from the China’s central bank to commercial banks, which are then distribute the currency directly to consumers.
35 Chinese commercial banks now allow customers to access the country’s new central bank digital currency (CBDC), suggesting yet another step toward a wider rollout. Recent media reports suggested that more than 150 million people have used China’s digital yuan app.
In addition to the six state-owned banks, the financial institutions that support withdrawals and deposits in the digital yuan include prominent names such as CITIC, China Everbright, China Merchants Bank, Shanghai Pudong Development Bank, Minsheng, Ping An, Guangfa and Zheshang, amongst others.
Thousands of Chinese citizens have been chosen by a lottery system, allowing them to spend their national cryptocurrency – otherwise known as Digital Currency Electronic Payment (DCEP) – in both offline and online stores using a dedicated app.
The new pilot comes barely a few months after the official launch of the “one point access,” a two-tiered clearing system floated by two major Chinese banks. These are the Industrial and Commercial Bank of China (ICBC) and the Agricultural Bank of China (ABC), which currently allow users to activate their digital yuan wallets in Shanghai and Beijing.