The Chinese e-pay platform WeChat Pay has unveiled a digital yuan interoperability solution that will allow users of the service to make payments in the central bank-issued token.
As reported, the central People’s Bank of China (PBoC) has recently expanded the number of cities included in its pilot for the digital CNY to include the financial and industrial hub of Guangzhou and other major urban centers.
WorkerCN reported that WeChat Pay has fully launched full “support for digital CNY” in all of the existing and new pilot areas. The solution will allow users to create digital yuan wallets in their names via the WeChat Pay-run WeBank service – allowing them to make and receive payments in the digital fiat using either the PBoC’s own app or WeChat Pay.
The move is a major boost for the token. WeChat is operated by the tech giant Tencent, and WeChat Pay, together with its rival Alipay (run by Alibaba), are estimated to account for 15% of China’s entire payments market.
Moreover, WeChat is more than a mere chat app with an e-pay platform attached – in China it is more akin to a digital ecosystem, comprising a vast array of online and digital services. WeChat Pay is the payment platform used in this ecosystem, and tapping into this represents a potentially major milestone for the digital yuan.
Many observers claim that Beijing is keen to break WeChat Pay and Alipay’s growing dominance of the payments market, particularly among younger people, but the PBoC has previously denied that this is the case.
Mu Changchun, the head of the PBoC’s Digital Currency Research Institute, said last year that WeChat Pay and PBoC were fundamentally different, explaining:
“WeChat Pay and other financial infrastructure systems are ‘wallets,’ while the digital yuan is a payment tool – in essence, the contents of a ‘wallet.’”
Having piloted the token at the Winter Olympics in February, Beijing is now keen to give the digital CNY another international test – albeit on Chinese soil.
The six cities in Zhejiang Province, including Hangzhou, that will host the Asian Games in September this year are set to be added to the pilot, with a view to allowing international athletes – and possibly spectators – to use the token.