In May 2021 it was also announced that the e-CNY would be integrated into Alibaba’s services ecosystem.
This pilot programme has since gradually been expanded through invites and cash incentives to eventually reach 140 million registered users by October 2021, according to the PBOC. The PBOC first began trialling the digital yuan app in April 2020 when it launched internal testing in four cities. It is important to note that the e-CNY is not a form of cryptocurrency, since it does not operate based on blockchain and is issued by a central bank (i.e., it is not decentralised like other forms of cryptocurrency). The digital yuan forms part of the monetary base (M0) of the country, which means the digital currency makes up a portion of the ‘cash’ that is in circulation. It is designed mainly to be used for high-frequency, small-scale retail purchases and transactions. It is issued by China’s central bank, the People’s Bank of China (PBOC). The digital yuan, officially called the Digital Currency Electronic Payment (DC/EP), is a digitised version of China’s legal currency, the renminbi (RMB). With over 1.2 billion users, of which around 750 million are active on a daily basis, this development could give significant exposure to the digital yuan, which some analysts say faces stiff competition from other online payment platforms – including WeChat itself. Shortly after the launch of the app, the Tencent-owned messaging app and payment platform WeChat announced that it would begin allowing users to select the digital yuan as a payment option to pay for services. Sign-up is possible through seven traditional commercial banks and two online banks, all Chinese: Zhangjiakou, Hebei Province (one of the locations for the Winter Olympics).
Users in the following 12 cities across China can now pay for goods and services with the digital yuan:
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