CBDCs: China leads global race as e-yuan payments arrive on WeChat

Thursday 06 January 2022 7:29 pm

China has emerged as a clear front runner in the race to develop state backed electronic money, with e-yuan payments now available on WeChat.

A pilot project for an e-yuan has gone from strength to strength with  a reported $9.7bn worth of transaction volumes settled as of the end of October 2021, according to the People’s Bank of China. This week pilot versions of the digital yuan wallet application hit mobile phone app stores and Chinese state media today reported that an e-yuan payments feature would be added to WeChat, a messaging app with 1bn users.

China Daily today claimed that WeChat users can now choose to pay with “digital renminbi” through an update to WeChat Pay, a feature used by 800m users each month.

The progress of China’s digital experiment will be watched with interest by central banks worldwide, many of which are plotting the development of CBDCs.

Europe’s Central Bank has announced plans to roll out an electronic version of the Euro by 2025.

In the UK, a joint task force led by the Bank of England and the Treasury is consulting on plans for Britcoin, a digital version of the pound backed by the central bank.

In November, the Bank of England’s governor for financial stability Jon Cunliffe underscored the case for digital cash, pointing out that debit and credit card have overtaken UK cash transactions in recent years.

The popularity of crypto currencies has also helped to underscore a gap in the market for ultra-fast, cheap payment technology which could be filled by CBDCs.

Read more: Banks could lose out on a fifth of deposits under Britcoin proposals – BoE