The financial sector, both in China and abroad, is interested in how quickly consumers in a large economy will adopt a central bank digital currency, or CBDC. The reported number of e-CNY users - 261 million - is more than the combined populations of Germany, France, Italy and Spain.
The speed and magnitude of the digital yuan rollout means retailers, financiers and governments can’t ignore itĬhina’s digital yuan, also called the e-CNY, is the world’s first truly large-scale central bank digital currency. To adapt, they should seek to integrate with the e-CNY in ways that avoid making it an either-or choice for consumers.įinancial institutions outside of China should track the progress of the e-CNY rollout with an eye toward the stability of the overall Chinese banking system, especially its propensity to accelerate bank run risk in the event of a shock. Global upsides like internationalizing the yuan, also known as the renminbi, and increasing China’s international clout fall near the bottom of their list of perceived “major advantages.”Įxisting payment providers stand to lose market share to the e-CNY, especially as the government highly incentivizes adoption via low fees for merchants and promotions for users. But a sizable portion could be induced to use the digital wallet with education or assistance in getting access.Ĭhinese consumers don’t see the digital currency’s potential advantages through the lens of geopolitics. Ningbo recently added an incentive for one-cent fares, and Guangzhou just added support for buses, per Coingeek.Close to 1 in 5 Chinese adults report having downloaded the official e-CNY app, and most of them use it for e-commerce and public services like transportation.įor those who don’t use it, most say they don’t need it, in part due to popular alternatives like WeChat Pay and Alipay. New use cases and incentives could change that-for example, 10 cities now accept the e-CNY for subway fare.But interest is lukewarm: Both Alipay and WeChat Pay have higher favorability ratings, and many users see no need to switch.That might draw customers to the digital yuan (e-CNY): The government reported 261 million enrollees, and 1 in 5 adults in China have downloaded the official e-CNY app, per Morning Consult.But Beijing has been cracking down on Big Tech, which could make apps harder to use and less appealing to customers. The bigger picture: Pressure on major mobile wallets is building.Ĭhina’s mobile payments market is highly mature: Nearly 8 in 10 mobile phone users make both proximity and peer-to-peer (P2P) mobile payments, mostly through Alipay and WeChat Pay.
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