China’s digital yuan app is now available to the public, bringing it one step closer to debut

However, acceptance of e-CNY remains a challenge, despite the fact that mobile payment services such as Alipay and WeChat Pay are now widespread.

China’s central bank has released a beta version of an app for the e-CNY — the world’s first large economy central bank digital currency (CBDC) — on the Apple and Android app stores, as the government ramps up its attempts to promote its own digital currency.

Previously, the pilot app — built by the People’s Bank of China’s Institute of Digital Currency — was only accessible through private connections. According to the app’s main page, however, residents of specified trial zones are eligible to register.

At the currently, the e-CNY app is available to users in Shenzhen, Suzhou, Xiong’an, Chengdu, Shanghai, Hainan, Changsha, Xi’an, Qingdao, and Dalian, as well as the Beijing and Zhangjiakou sites for the Beijing Winter Olympics.

The PBOC developed the e-CNY app in collaboration with a number of banks, including the Industrial and Commercial Bank of China, the Agriculture Bank of China, the Bank of China, the China Construction Bank, the Bank of Communications, the China Merchants Bank, Tencent-backed WeBank, and Ant Group-backed MYbank.

The PBOC’s decision to launch the e-CNY app on app stores comes just weeks before the Lunar New Year, which falls on Feb. 1 this year, when Chinese people traditionally distribute red packets as good luck money for the coming year.

While China is preparing to launch its sovereign digital currency, and mobile payment networks such as Alipay and WeChat Pay are already widely used, it may be difficult to convince individuals to convert to the e-CNY. Alipay and WeChat Pay account for more than 90% of China’s nonbank payment market.

“The e-CNY seems to be secure due to its traceability,” said Lecheng Lin, a 22-year-old Shanghai resident who works in the banking business. “However, it does not seem to be particularly handy, since it lacks the utility payment functionalities (which are included into Alipay and WeChat Pay).”

According to one 24-year-old working in the media business in Beijing, she would choose to use Alipay over the e-CNY due to the former’s money management capabilities. Another 26-year-old medical professional said that she opened a wallet to help a friend’s marketing efforts at the Agricultural Bank of China, but has never spent a dime from it.

“Use of the digital yuan during the trial phase is expected to be sluggish but steady in China, given individuals already have access to excellent digital payment channels,” Richard Turrin, a Shanghai-based fintech consultant and author of “Cashless: China’s Digital Currency Revolution.”

“It’s critical to remember that these are trials and that not all stores accept the e-CNY yet, so people will be hesitant to switch,” Turrin said, adding that once the e-CNY system is fully operational throughout the country, steady growth can be expected, fueled in part by salary, transportation, and social services payments. “Eventually, wages will be paid in e-CNY, as shown by the experiments conducted by JD.com,” he continued.

Matteo Giovannini, a senior finance manager at the Industrial and Commercial Bank of China, one of the country’s largest commercial banks, that while the digital yuan will likely coexist with these payment platforms in the short term, “in the long run, people will recognise the convenience of the sovereign digital currency, as it is a legal tender that is not tied to a single company platform and thus can be transferred across multiple e-commerce platforms.”

Giovannini noted that since e-CNY is completely programmable and trackable, its widespread use would undoubtedly result in an elevated degree of capital movement monitoring and a significant improvement in the transmission of central bank monetary policy to the economy.

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