WeChat Pay Interoperability is Another Key Breakthrough for Digital Yuan Pilot

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Payment platform WeChat Pay started its own digital journey in yuan, at a time when millions of Chinese citizens are getting their first taste of what life is like with a central bank digital currency (CBDC), as citizens of some of the country’s largest cities they started using a pilot version of a CBDC application.

WeChat Pay, operated by the tech giant Tencent, is one of the largest digital payment platforms in China and, together with Group of ants‘s Alipay (part of Alibaba business empire), accounts for a whopping 15% of the entire Chinese payments market.

Interoperability with the platform will be seen as a big step forward for Beijing, which many argue that it wants to cut both digital payments and crypto markets with its new token.

Cryptocurrencies have been swayed by two crackdowns, the most recent of which came in September of last year. And unlike other CBDC projects, Beijing says its digital yuan initiative does not make use of blockchain technology.

The central People’s Bank of China (PBoC) has refused to commit to a full national rollout, but many of the most populated parts of the country already enjoy access to the digital yuan thanks to a rapidly expanding pilot, and the bank is confident that the token will be ready. to show the world at the Winter Olympics, to be held in the capital early next month. The Beijing Olympics sites are part of the pilot.

According to media Sina and Hexun, WeChat Pay users can access the digital yuan functionality through the WeBank service by completing a quick verification process, and now they can pay with the token “by scanning a digital payment code in yuan in Wechat, ”Or allowing merchants to scan a code using their own devices.

‘Digitization of the last mile’ of the consumer journey

Although the PBoC is still willing to downplay the importance of developments like these, the WeChat Pay user base is gigantic. More than just a chat app, WeChat is also a digital marketplace, an e-commerce gateway, a game hub, and has more internet features. The platform has more than 1 billion users, many of whom are WeChat Pay customers.

Alipay users will likely be able to access the token soon as well. Users in pilot areas can access the CBDC application through its affiliate, the online loan network. My bank. Alipay has also participated in the testing of yuan digital payments and may well follow suit with its biggest rival.

Yicai reported that major online players have also jumped on the digital yuan train. The most notable of them is one of the largest e-commerce platforms in the country, Jingdong Mall (also know as JD.com). Together with Alibaba’s e-commerce wing Small (which has also started to accept the digital yuan as a payment method), the two companies account for the majority of the online retail market in China.

Last year, the Ele.me food delivery platform and the Hema The grocery store chain also started accepting digital payments in yuan in pilot areas. Both are owned by Alibaba.

Yicai reported that Meituan Waimai, one of the largest food delivery networks in the country, has also added digital wallet payment options in yuan.

The same outlet quoted experts as saying that other banks would soon be added to the roughly nine financial institutions offering yuan digital wallet services, with more online industries poised to add interoperability features.

Zhou Weiran, PwCThe managing partner of Technology, Media and Telecommunications claimed that the digital yuan had the power to “digitize the last mile” of the consumer journey, and would allow banks and merchants to access consumer behavior data and obtain information on the situation. of the public. spending patterns.

However, Zhou noted that “large-scale adoption” “will not happen overnight,” and many are still interested in alternative digital solutions such as Alipay and WeChat Pay or cash.

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Learn more:
– The Digital Yuan application of the Central Bank of China arrives at Apple and Android stores
– Chinese central government wants to create ‘digital asset exchanges’ as CBDC approaches

– Recent ruling from China’s Bitcoin court ‘Not an isolated case’ and part of ‘an ongoing trend’
– Chinese banks ‘educate’ the public about the pitfalls of cryptocurrencies

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