China’s social media giant, Wechat has said it will support the digital yuan in a move that is expected to increase the of Chinese residents that use the central bank’s digital currency (CBDC). Wechat’s support of the digital yuan potentially avails the digital currency to the social media’s 800 million active users.
New App Provides Access to CBDC
Wechat, one of China’s biggest messaging and payment apps, is reportedly set to support the digital yuan, China’s CBDC. The addition of the CBDC to the social platform is expected to boost the adoption rate of the digital yuan.
The messaging giant’s decision to support the CBDC comes shortly after the central bank’s launch of the e-cny app that gives users in certain Chinese regions and cities access to the digital yuan.
However, as the report in the Coinrivet notes, Wechat’s announcement, as well as the inclusion of Alibaba’s Alipay in the digital currency’s ecosystem, suggests that the e-cny app alone may not achieve the central bank’s goal of getting more Chinese to use the CBDC.
Central Bank’s Reasons for Partnering Wechat and Alipay
To support this assertion, the report quotes Linghao Bao, an analyst at consultancy Trivium China who says he sees the sense in the central bank’s decision to co-opt the two internet giants. He said:
Chinese consumers are so locked in Wechat Pay and Alipay, it’s not realistic to convince them to switch to a new mobile payment app. So it makes sense for the central bank to team up with Wechat Pay and Alipay as opposed to doing it on its own.
Wechat’s support of the digital yuan adds to the social media app’s growing list of use cases which already includes a payment service, Wechat Pay. The social media giant’s addition of the CBDC to payments services also potentially gives the digital currency access to Wechat’s approximately 800 million active users.
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Terence Zimwara
Image Credits: Shutterstock, Pixabay, Wiki Commons
