TL;DR Breakdown
- China may be eyeing to launch digital yuan in 2022.
- China integrates PBOC to payment platform, WeChat.
China has integrated its digital currency Digital Yuan to online payment and chatting platform WeChat. The mobile application is China’s largest social messaging and payment app that boasts of over a billion users.
The recent expansion of digital yuan trials, which were limited to selected provinces in the country, hint at a possible launch this year.
There is a common trend of one app offering multiple features in China. WeChat is definitely one of them, which acts as a messaging app like Whatsapp and Telegram and can also be used as a social media and payment app. The integration raises questions if it the unofficial launch for digital yuan.
Linghao Bao, an analyst at consultancy Trivium China, confirmed this, stating that “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.
He said that it makes sense for the central bank to team up with WeChat Pay and Alipay as opposed to doing it on its own.
Since 2014, China and its Digital Yuan
China began developing its Central Bank Digital Currency (CBDC) in 2014 and completed it at the development at the end of 2019. The public trials began soon after, which has evolved from being used as a traveling subsidiary by a few government employees to now being used in various sectors, including retail and daily payments.
The trials have been going on for over two years now, and industry insiders believe the upcoming Winter Olympics in February could be the perfect global event for the digital yuan launch.
China made several other countries around the globe look towards developing their own Central Bank Digital Currency. Russia, Japan, and South Korea will begin pilot projects for its CBDC trials in 2022.
