China to Make Digital Yuan and Payment Apps More Connected

(Bloomberg) --

China’s digital yuan will be further interlinked with mobile payment apps that have dominated the country’s retail transactions, according to China’s central bank governor.

The People’s Bank of China will push to increase the digital yuan’s “interoperability with existing payment tools” and “improve the e-CNY ecosystem”, Governor Yi Gang said Tuesday during a virtual panel organized by the Bank of Finland Institute for Emerging Economies. E-CNY is the bank’s official name for its digital currency. 

The PBOC will establish a management model for the virtual currency modeled on how cash and bank accounts are managed and will improve its efficiency, privacy protection and anti-counterfeiting functions, according to Yi. It will also test the e-CNY’s impact on monetary policy and financial markets, he said.

A forerunner among global central banks in developing a digital currency, the PBOC has been testing the e-CNY in about a dozen regions since late 2020. A total of 140 million individuals have set up a digital yuan accounts, up from 20.8 million at the end of June, according to the central bank.

The PBOC has partnered with tech giants including Ant Group and JD.com Inc to promote the digital currency, and users in pilot zones can access their e-CNY wallet through Ant’s Alipay app or top up funds.

Yi reiterated the digital yuan will be primarily used for retail transactions within China, and the central bank will continue to supply cash. The PBOC is preparing for a broader trial at the Beijing Winter Olympics in February, where foreign athletes could be allowed to use the virtual currency.

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With assistance from Bloomberg