According to a former Chinese central banker, digital yuan use has been low

In two years, total e-CNY transactions barely surpassed $14 billion, according to a former China central banker, who added that the outcomes were “not ideal.”

A former official of the People’s Bank of China (PBOC), the nation’s central bank, is dissatisfied that the digital yuan is not widely used.

Caixin reported on December 28 that Xie Ping, a former PBOC research director and current finance professor at Tsinghua University, made disparaging remarks regarding China’s central bank digital currency (CBDC) during a recent university conference.

Two years after its introduction, Xie observed that the total value of digital yuan transactions had just surpassed $14 billion (100 billion yuan) in October. “The results are less than ideal,” he stated, adding, “use has been quite low and inactive.”

In January, the PBOC said that only 261 million customers had set up an e-CNY wallet, despite the government’s quick extension of the trials and introduction of additional wallet features to lure consumers.

According to a China UnionPay research from 2021, this compares to the about 903,6 million individuals that use mobile payments in China.

To increase usage, the former central banker said that the use case of e-CNY “has to be altered” from its present use as a cash replacement to other purposes, such as the capacity to pay for financial products or to link to other payment systems.

He likened the digital yuan to other third-party payment systems in the nation, including WeChat Pay, Alipay, and QQ Wallet, which permit investing, lending, and borrowing.

Some third-party financial applications are compatible with e-CNY, but they are seldom utilised since, according to Xie, “people are acclimated to” the original service and “transition is tough.”

Former officials seldom criticise Chinese government projects in this manner, indicating that China may be struggling to establish momentum with its CBDC effort.

In December, the government swiftly extended e-CNY trails to four other cities. It was earlier extended in September to the populous Guangdong province and three others.

In an effort to entice users in time for Chinese New Year, the e-CNY wallet software was updated with the ability to transmit digital copies of traditional red packets or red envelopes holding money – a popular ritual during celebrations.

Also Read: Two Months Before FTX Went Down, SBF Met With Biden’s Top Advisors