China’s central bank digital currency (CBDC), also known as the digital yuan, has been integrated into WeChat, which is currently one of the largest social media platforms in the country. WeChat Pay, the platform’s mobile payment service, now supports the digital yuan for transactions.
WeChat announced on Wednesday that it has expanded the use of e-CNY payments to transactions taking place through its short video and mini-app platforms, which cover merchants ranging from small influencers to brands promoting products on WeChat.
This move is part of China’s ongoing efforts to promote the use of its CBDC and establish it as a mainstream form of payment. For several years, China’s central bank has attempted to increase the adoption of digital yuan, or e-CNY, which is part of the country’s monetary base, M0. The bank has a dedicated app for e-CNY that has 261 million individual users as of early 2022, but it is also enlisting private sector assistance to bring its official digital money to a wider user base.
For those who are unfamiliar with WeChat, the Tencent-owned messenger is a sprawling empire that far outperforms WhatsApp and Messenger. It has its own payment system, WeChat Pay; it supports millions of third-party lite apps, making it a competitor to the App Store; it has a short video network that competes for eyeball time with Douyin, TikTok’s Chinese version; and a slew of other features that could easily be standalone apps — but Asia loves super apps.
According to Tencent, WeChat mini apps will generate several trillion RMB ($1 = RMB6.9) in transaction value by 2022. Clearly, that sea of microtransactions is ripe for the digital yuan.
The integration with WeChat Pay is significant because it provides a convenient and familiar way for users to access and use the digital yuan.
The digital yuan has been in development for several years, and China has been conducting pilot programs in various cities to test its use in real-world scenarios. The country sees the digital yuan as a way to modernize its financial system, reduce reliance on cash, and improve financial inclusion.
With the integration of the digital yuan into WeChat Pay, it will be interesting to see how quickly and widely it is adopted by users. China’s large population and extensive use of mobile payments make it a fertile ground for the digital currency’s success.