Tencent Holdings’ WeChat App, the largest messaging app in China and one of the most popular payments in the country, has started supporting China’s central bank digital currency (CBDC). A report unveiled this news today, noting that the app’s users now have an option to pay with e-CNY (digital yuan).
According to the report, WeChat users will have to complete identity verification through the e-CNY app, a digital yuan wallet application created by the Digital Research Institute of the People’s Bank of China (PBoC). Once this function is activated, users can send, receive, or pay using e-CNY.
Through this decision, WeChat will help the Chinese government get a vast userbase for its CBDC quickly. Reportedly, WeChat App boasts a myriad of services and over 1 billion users, feats that have seen it earn the moniker mega-app. The app has over 800 million monthly active users, and exposing this population to e-CNY will see the CBDC achieve mass adoption rapidly.
If you can’t beat them, join them
This development comes after the PBoC launched the beta version of the e-CNY wallet earlier this week to encourage the use of the digital yuan. Although the central bank had completed numerous e-CNY trials before this launch, the CBDC had relatively low adoption, with only 140 million citizens opening a digital yuan account by October 2021.
Compared to WeChat and Alibaba’s Alipay, which had over 1.3 billion users by June 2020, the e-CNY wallet did not stand a chance.
Linghao Bao, an analyst at consultancy firm Trivium China, said,
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. So it makes sense for the central bank to team up with WeChat Pay and Alipay as opposed to doing it on its own.