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China’s social media giant WeChat has concluded plans to support the nation’s pilot program for the Central Bank Digital Currency (CBDC) also known as Digital Yuan. The plan which was initially revealed in the early days of 2022 is now set to kick-off, according to recent announcements.
WeChat as a social platform currently hosts over one billion users. It is one of the most widely used mobile applications in China and has already integrated other transactional services such as ordering food and booking cabs. Integrating the digital yuan onto the platform is expected to produce a significant outcome, both for WeChat and the digital yuan development.
On the side of WeChat, the integration of the digital yuan is expected to boost its user base to a higher degree. More people within the region would likely join the existing users since payment services have already been established on the platform. In terms of sentiments, it could come across as a seamless integration without many complications.
On the other hand, the popularity and already established status of WeChat within the country will be a booster for the adoption of the digital yuan. In its current state, the CBDC implementation and usage have so far been impressive. Coupled with other aspects of the pilot program, integration into WeChat can be a game-changer and boost the payment system.
About 11 more cities have already been mapped out for trials for the digital yuan. There are also plans of using it in the upcoming Asian games, just like in the recently concluded Winter Olympics where it was trialed. Although there are no clear reports on the level of success it had during the latter, the willingness to implement it in another event so soon is suggestive of progress in the development.
From an overall perspective, the digital yuan pilot program which started in 2020 has so far been successful. According to reports, nearly $14 billion has been transacted so far using the digital yuan, while there remain some accounts that were opened but have never been used. The pilot program has traversed major cities like Beijing, Sichuan, Shenzhen, Suzhou, Xiong’an, Chengdu, and Shanghai, among several others.
According to the People’s Bank of China (PBoC), the 11 cities that have been scheduled for the next batch of trials are Tianjin, Chongqing, Guangzhou, Fuzhou, Xiamen, Hangzhou, Ningbo, Wenzhou, Shaoxing, Jinhua, and Huzhou. Among these cities, the latter six mentioned are in the Zhejiang province which will be hosting the upcoming Asian Games.
Adding to the integration on WeChat, this could represent one of the most intensive sessions of the digital yuan pilot program. China’s CBDC development is regarded as the most advanced among all other such projects in different parts of the world. In its case, China ramped up its CBDC program after banning the use of cryptocurrencies within its borders.
Although the Chinese government has provided reasons like carbon neutrality goals and proper oversight of its financial sector to be behind its ban on cryptocurrencies, many practitioners have thought otherwise. To such people, one of the key reasons for the ban is to eliminate the competition posed by cryptocurrencies against the nation’s CBDC project.
Whatever the case, China’s pursuit of the CBDC program has been intense and full of purpose. With the proposed integration by WeChat, another significant milestone is likely to be achieved as we move closer to what could be the most complete CBDC project in the world.
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