China’s digital currency reaches one billion users on WeChat • The Register

China’s central bank digital currency, the digital yuan, has been integrated into Tencent’s flagship messaging app, WeChat, and appears as a payment option when users use the super app store.

WeChat has over 1.2 billion monthly active users, is ubiquitous in China and is popular outside the Middle Kingdom as well.

For now, only users in Chinese cities where the digital yuan is already tested can choose to pay with the currency. But that pool of cities continues to expand – this week the People’s Bank of China announced that eleven cities had been added to the trials. The collective population of these cities exceeds 80 million – a total that would rank as the 20th most populous nation in the world.

Making the digital yuan accessible to so many people is a clear sign that China wants the digital currency to be widely used.

Integrating it with WeChat is even more important. Cash is obsolete in China, and payment with apps accounts for the overwhelming majority of transactions.

Alibaba and Tencent dominate these payments, but Beijing isn’t entirely happy that the web giants are playing such a central role in Chinese life. There are currently no signs that Beijing is planning to restrict its payment services, but the addition of the digital yuan as an option means the People’s Bank of China will gain a place in the tools most Chinese use for their daily purchases. .

The Bank will also gain a foothold overseas, as many people around the world use WeChat. The Chinese diaspora is involved enough in the app to be used as an election campaign tool outside of China.

If the integration with WeChat ever sees the digital yuan used outside the Middle Kingdom, Beijing will be very happy. He hopes the currency could compete with the ubiquity of the US dollar in international trade.

Central Bank digital currencies like the Digital Yuan are designed to replace cash and provide the convenience of digital payments while maintaining the anonymity inherent in exchanging coins or notes. However, US senators have warned that the digital yuan allows Beijing to monitor users – an allegation which, if true, makes the currency rather less attractive. ®

Sylvia B. Polson