February 6, 2023

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A former executive of the Chinese central bank – the People’s Bank of China (PBOC) – has voiced dissatisfaction because of the low usage of the digital yuan project in the country. Xie Ping has been formerly operating as a research director at PBOC and is presently a finance professor working at Tsinghua University.

Former Executive of Chinese Central Bank Slams e-CNY for Low Usage

Xie criticized the central bank digital currency (CBDC) of China while appearing at a university conference, as reported by the native news outlet Caixin. Back in October, Xie highlighted that the transfers made with digital yuan had just surpassed the $14B (100B yuan) mark at the time when it had been a couple of years since the launch of the project.

The former executive mentioned that the findings were not according to expectations. He suggested that a significantly inactive performance was made by the digital yuan along with very low usage. The swift enhancement of the trials conducted by the country’s government over the latest wallet has been targeting to allure the consumers.

However, a report was published by PBOC in January 2021, saying that just 261M customers had obtained e-CNY wallets. This is much lower than the 903.6M people using mobile-based payment options in the Chinese jurisdiction, as per a 2021 report by UnionPay.

Xie proposed the view that there is a requirement for e-CNY to have a shift from its present use in the form of a substitute for cash to the other use cases.

They take into account enabling financial products’ payment or joining additional payment platforms. As per Xie, this would enhance the adoption to a great extent. He analogized the digital yuan as well as the rest of the 3rd-party systems of payment operating within the country like QQ Wallet, Alipay, WeChat Pay, and so on.

Has per him, these platforms offer lending, loans, or investments and have established a structure of the payment market to meet the requirements for regular consumption.

A few of the 3rd-party financial applications are compatible with e-CNY however they have a decreased usage, as asserted by Xie. He added that the citizens of China are utilizing the genuine service and the modification into it is hard.

Such condemnation of the initiatives taken by the Chinese authorities is rare to be seen from the former executives. This signifies that there might be some serious issues being faced by the country in the matter of getting attention toward its CBDC endeavor.

In the current month, the government has made a quick expansion of its e-CNY trials to 4 other cities. It was formerly spread out in September 2022 to Guangdong province (the most populous area) and 3 others.

e-CNY Wallet Gets New Features to Attract Public during Chinese New Year

The exclusive characteristics were also incorporated into the wallet app of e-CNY. This was done to grasp the attention of the common masses toward the project as currently, the country’s public is showing seemingly less interest in it.

By making such endeavors during the Chinese New Year, the authorities are alluring the people toward the state-based digital currency with the provision of more functionality.

The new features include the facility to deliver the conventional hongbao’s (red envelopes or red packets) digital versions containing money. This is a famous custom in China during the New Year festivities.

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