A former China central banker said cumulative e-CNY transactions only crossed $14 billion in two years, adding the results were “not ideal.”
A former official of the People’s Bank of China (PBOC), the country’s central bank, has expressed disappointment that China’s digital yuan is seeing very little use.
Xie Ping, a former PBOC research director and current finance academician at Tsinghua University, created critical public comments about China’s central bank digital currency (CBDC) at a recent university conference, according to a Dec. 28 Caixin report.
Xie noted that accumulative digital yuan transactions had only crossed $14 billion (100 billion yuan) in October, 2 years when launch. “The results are not ideal,” he said, adding that “usage has been low, highly inactive.”
Despite the government’s fast expansion of the trials and new wallet options to do to attract users, a January PBOC report stated that only 261 million users had established an e-CNY wallet.
This compares to around 903.6 million people that utilize mobile payments in China, per a 2021 China UnionPay report.
The former central banker aforementioned the use case of e-CNY “needs to be changed” from its current use as a money substitute and opened to alternative uses like the power to buy monetary merchandise or connected to a lot of payment platforms to boost adoption.
He compared the digital yuan to alternative third-party payment systems within the country like WeChat Pay, Alipay, and QQ wallet, which allow for investments, lending or loans. He said they “have formed a payment market structure that has met needs for daily consumption.”
Some third-party financial apps are e-CNY compatible however see very little use, as Xie said “people are used to” using the original service and change “is difficult.”
Such criticism of Chinese government initiatives is rare from former officials and signals the country may be seriously struggling to gain traction on its CBDC initiative.
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The government has rapidly expanded e-CNY trails last in December to four new cities. it was previously expanded in September to guangdong province, its most inhabited, and 3 others.
New options were added to the e-CNY notecase app in a bid to attract users in time for Chinese New Year that supplementary practicality to send digital versions of traditional red packets or red envelopes (hongbao) containing cash — a popular custom during festivities.
(JESSE COGHLAN, Cointelegraph, 2022)