#SOME CHINA ECNY ALIPAY WECHAT PAY UPDATE#

With more features such as ‘red pockets’ and ‘cash coupon’ being rolled out, and more promotions from banks in the future, we believe the adoption rate of e-CNY could gradually pick up,” says Zhou. “However, most consumers in China are still more familiar with Alipay and WeChat pay.

According to CLSA, as of December 2021, there had been 8.1 million outlets that use e-CNY and 261 million retail e-CNY wallets had been opened, representing nearly 20% of China’s population. In a recent industry insight, Zhou said that the rollout of e-CNY has been going on well on the merchant side. Since then more and more use cases are arising by including commercial banks and internet companies (such as Tencent’s WeBank pay and Alibaba’s MyBank) in a dual-tier system, writes Daniel Zhou, Senior Investment Analyst at Mirae Asset Global Investments. Getting both WeChat Pay and Alipay as express payment options on the e-CNY app shows an increased effort by the People's Bank of China (PBOC), the country's central bank, to spur adoption of the. The e-CNY made its international debut during the Winter Olympics. The digital yuan could increase competition in China's mobile payments market which is dominated by Ant Group's Alipay and Tencent's WeChat Pay. A recent paper by Heng Wang ‘China’s approach to Central Bank Digital Currency provides a good overview of the current state of play around the #eCNY.China is at the forefront of implementing a digital fiat currency to replace cash and coins. 🔸The eCNY is a ‘value-based quasi-account based and account based hybrid payment instrument’ (that’s a mouthful). There is limited elaboration on what ‘loosely coupled account linkage’ actually means though. 🔸Unbanked individuals could access basic financial services without needing to open a bank account, which are provided through the wallet feature. Also, foreign visitors can open an eCNY wallet to meet their daily payment needs without opening a domestic bank account. 🔸The People's Bank of China states that the system “does not provide information to third parties or other government agencies unless stipulated otherwise in laws and regulations.” Although the PBOC will know a user’s identity for a digital wallet app, transactions conducted through the app will only transmit the wallet ID. 🔸The government argues this makes it harder for online platforms to harvest user info. Amendments to the Law of the PBOC of 2020 also seek to establish an information sharing mechanism with member institutions of the Financial Stability and Development Committee under the State Council.

#SOME CHINA ECNY ALIPAY WECHAT PAY UPDATE#

🔸Not clear yet how evolving rules on sharing government information among government agencies will apply to the eCNY. UPDATE 2020: WeChat supposedly allows foreign credit cards to be used on their platform, but as I’ll talk more about below, this doesn’t seem to work well. 🔸There’s different ways the eCNY could make its way out of China. Disrupting the $500 billion worth of import/export trade between mainland China and Hong Kong SAR through an eCNY-eHKD corridor is one. 🔸Another is through Belt-and-Road ( #BRI) related projects and transactions also to promote #RMB settlement, or through BRI related loans and investments. A ‘bill in yuan’ approach for Asian and African partners. Getting both WeChat Pay and Alipay as express payment options on the e-CNY app shows an increased effort by the Peoples Bank of China (PBOC), the countrys central bank, to spur adoption of the. 🔸China’s outbound tourism could also promote the role of eCNY if for example a Chinese tourist could settle with it in an overseas hotel or restaurant chain which has an eCNY machine installed that transacts directly through a PBOC settlement system. 🔸Distribution through pre-existing platforms (AliPay, WeChat pay, China Union Pay Merchant Services etc). 🔸It’s no secret that initiatives like #mBridge, or the recent overtures made by Xi to the Gulf Cooperation Council in Riyad to price #Saudi oil in yuan on the Shanghai Petroleum Exchange are not so thinly veiled moves to de throne the #dollar. 🔸China is also a norm entrepreneur working to set global #data and #CBDC standards through the #G20 and International Telecommunication Union (ITU) respectively. 🔸China is leading the research push for standardization of the CBDC ecosystem and reference architecture. 🔸Beijing was also first to add CBDC related content to the #ISO20022 repository and the Legal Entity Identifier (LEI) will be used in China’s CBDC ecosystem as part of the BRI.

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