China’s digital currency comes to Tencent’s WeChat for expansion promotion

On June 29, 2018, Hong Kong, a smartphone with the social network application WeChat and other icons was displayed on the screen.

S3 Studio | Getty Images News | Getty Images

TencentWeChat, which has China’s largest instant messaging application and one of the country’s largest payment services, will begin to support the country’s sovereign digital currency.

Since 2014, China has been studying the digital renminbi And it has not been promoted nationwide. However, if people start to pay with it, the move of WeChat, which has more than 1 billion users, to support digital currency may provide a huge boost for it.

Users outside of China may not know WeChat well, but within the world’s second largest economy, WeChat is ubiquitous. It is often referred to as “Super App” Because many services are wrapped in it. People can use the messaging function to pay through WeChat Pay, and they can also call cars and order meals.

WeChat Pay allows users to display barcodes to merchants on their mobile phones to pay for in-store merchandise. It can also be used for online purchases. WeChat Pay has more than 800 million monthly active users.

So far, the People’s Bank of China, which issued digital renminbi or e-CNY, has completed Limited trials in certain cities through lottery The central bank issued a small amount of currency to some citizens.

But now there are signs that, although there is no specific date for nationwide launch, the People’s Bank of China is seeking to expand the use of the digital renminbi.This week, the The People’s Bank of China launches an electronic renminbi application for users in some regions and cities in ChinaThis will allow anyone in these regions to download and register to use digital currency. Previously, users could get the app on an invitation-only basis.

In China, WeChat and Alipay, operated by Alibaba subsidiary Ant Group, dominate mobile payments; last year, Alipay also began to experiment with digital renminbi payments. But WeChat and Alipay are also potential competitors for the digital renminbi’s own applications.

Now, as WeChat plans to launch e-renminbi and Alipay, the People’s Bank of China will have more opportunities for citizens to use digital currency.

“Chinese consumers are so obsessed with WeChat Pay and Alipay that it is unrealistic to persuade them to switch to new mobile payment applications. Therefore, it makes sense for the central bank to cooperate with WeChat Pay and Alipay instead of working on them. I,” Linghao Bao, an analyst at consulting firm Trivium China, told CNBC.

The potential expansion of the use of electronic renminbi occurred before the Beijing Winter Olympics this year.The goal of the People’s Bank of China is Digital element ready for the event In the capital of China.