China’s most popular messaging service, as well as one of the country’s biggest payment services, WeChat, owned by Tencent, is launching support for the country’s digital currency.
It’s been over two years since China started to work on the digital yuan and it hasn’t been rolled out nationwide yet. Nevertheless, now that WeChat, which has over 1 billion users, is supporting a digital currency, it could give it a huge boost if people start to use this to arrange payments.
It’s true that WeChat isn’t that well known outside of China, but it’s a ubiquitous tool within the world’s second-largest economy inside that country. In addition to the messaging function and the ability to make payments via WeChat Pay, users of WeChat can hail taxis and order food via the service.
In addition to enabling chats, paying bills, and ordering food or transportation, WeChat Pay now also allows its enormous user base to make payments. According to WeChat Pay statistics, there are over 800 million active users every month.
It is near impossible to convince Chinese consumers to switch to another mobile payment app, since they are so locked in to WeChat Pay and Alipay. Hence it is more logical for the central bank to form a partnership with WeChat Pay and Alipay rather than do this on its own.
There have been limited tests conducted so far by the People’s Bank of China (PBoC) on the digital yuan in a few major Chinese cities, where small amounts of the currency have been used in commercial and consumer environments. While there is no timetable as to when the digital currency will be rolled out throughout the country, it seems that the Central Bank of China will be keen to extend the use of the currency.
With regards to the development of an electronic currency for the public use, China has established a substantial lead over most countries that are still in research phase in developing a digital currency for the public use. The Chinese central bank released on the Apple App Store and Google Play Store this week a pilot version of a digital yuan wallet app which allows users to access their money from anywhere in the world.
