- WeChat has integrated with the digital yuan app, allowing faster and more convenient payments with the CBDC.
- The integration of the CBDC with WeChat follows a similar move by Alipay.
- This integration enables faster payments with the CBDC through the app’s mini-programs.
WeChat Pay, a widely used mobile payment and digital wallet service in China, has made significant moves to support the central bank digital currency (CBDC) app directly, according to recent reports. Integrating CBDC into WeChat Pay is seen as an essential step towards expanding the use of digital currency, as more than one billion active users use the app.
Advancements in Pilot Programs and Trials
Following the integration, WeChat Pay users can now make payments via their CBDC wallets, subject to a daily limit of 5,000 yuan (equivalent to $720 at press time). The transaction limit is 2,000 yuan ($289), but plans are to expand its use cases and payment scenarios.
The People’s Bank of China has been committed to expanding the use of its CBDC, as has been made evident from the many use cases it has already introduced, such as the Spring Festival holidays, where local governments offered digital yuan coupons to citizens.
Payment Giant Alipay Shows CBDC Support
China has distributed digital yuan through airdrops on various occasions. Furthermore, the CBDC has already gained momentum and started to be integrated into various platforms like Alipay, which has helped provide a platform for widespread adoption.
Alipay linked its platform to the digital yuan app in December 2022, representing a significant step towards expanding available payment avenues for users of the digital yuan. Alibaba’s e-commerce platform allows users to buy products and services using CBDC.
On the Flipside
- The impact of China’s efforts to expand the use of digital yuan through airdrops and coupons has been negligible up to this point, according to a PBOC official.
- While a good starting limit, the transaction limit of 2,000 yuan ($289) currently hinders users looking to carry out transactions on a larger scale.
- Many countries, such as the United States and European nations, have opted to undergo intensive research periods first, indicating that the long-term effects of CBDCs on traditional financial systems are still being determined.
Why You Should Care
With over one billion users, integrating the digital yuan into WeChat Pay presents a significant opportunity for the widespread adoption of a CBDC in China.
Another country exploring a CBDC is Australia; read more about it here:
Australia and Mastercard to Mastermind CBDC Test Pilot
For more information on the current state of the overall market, read here:
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