A former employee of China’s central bank, the People’s Bank of China (PBOC), has voiced concern that the country’s digital yuan is not being used more.
According to a Dec. 28 Caixin report, Tsinghua University finance professor and former PBOC research head Xie Ping criticised China’s central bank digital currency (CBDC) in public at a recent academic conference.
Two years after its inception, the total value of digital yuan transactions had barely reached $14 billion (100 billion yuan), said Xie.
Only 261 million users have created an e-CNY wallet, according to a January PBOC report, despite the government’s quick expansion of the trials and additional wallet features in an effort to lure consumers.
In comparison, a 2021 China UnionPay research estimates that 903.6 million Chinese consumers use mobile payments.
The use case of e-CNY needs to be expanded beyond its current use as a cash substitute in order to increase adoption, the former central banker argued. This may include the ability to purchase financial products or connecting to other payment platforms.
He contrasted the digital yuan with other third-party payment platforms in the nation like WeChat Pay, Alipay, and QQ Wallet that permit lending, investing, and borrowing. He said that they have established a payment market system that satiated daily consumption needs.
Although some third-party banking apps are e-CNY compatible, Xie claimed that switching is challenging because many are accustomed to the original service.
Such criticism of government programmes by former officials is unusual and suggests that China may be having severe difficulties gaining support for its CBDC initiative.
The most recent expansion of e-CNY trails by the government was to four additional locations in December. The provinces of Guangdong, its most populous, and three others were previously included in the September expansion.
In an effort to draw users in time for Chinese New Year, new capabilities were added to the e-CNY wallet app. These features added functionality to transmit digital replicas of traditional red packets or red envelopes holding money.
