WeChat, a popular Chinese instant messaging social media app which also facilitates mobile payments was developed and released in 2011 by Tencent. Since its launch, the app has garnered widespread adoption in China owing to the fact that it currently has more than 1 billion active users on a monthly basis. The application has made major milestones especially in the year 2021 when it was named the worlds biggest standalone mobile application. The app is available on many platforms like MacOS, IOS, Windows and Android. It also supports other gadgets like watches and bands through Android and HarmonyOS.
One of the recent strides WeChat has made to bolster faster and seamless payments for its users is the integration of the Digital Yuan to its platform. The Digital Yuan, a Chinese Central Bank Digital Currency(CBDC), backed by the Chinese government has achieved adoption not just from Wechat but also from other payment service providers in China including Alipay. The Yuan Digital Yuan was among the first digital currencies to be launched to the public by a major economy. The Yuan has been undergoing public testing since April of 2021 and its adoption by major Chinese payments facilitators is a good sign towards the Yuan’s stability and global adoption. This is considering the fact that it had a slow start according to data released by The Peoples Bank Of China which reported that the Yuan’s online platform had about 261 million users at the end of 2021 accounting for less than 20% of the total Chinese population. The Chinese government has since then embarked on pursuing its citizens to adopt the online Digital Yuan platform, e-CNY, by conducting promotional activities. The peoples Bank Of China is giving gifts and rewards in Digital Yuan to some wallets while dishing out lotteries to local communities in a bid to get ahead of other CBDCs.
One of the benefits WeChat users will enjoy from this integration is the ability to make payments through the app in the e-CNY digital Yuan platform. WeChat has hinted that it has plans to add more use cases and payment scenarios to this integration but currently WeChat has enforced a 2 000 Yuan($289) transaction limit with a daily limit of 5 000 Yuan($720).
With this integration, the Digital Yuan has a large pool of 1 billion WeChat users to gain adoption from but many are skeptical. This is because the Chinese government has an ever growing interest in digital assets especially CBDCs and in its push to persuade investors and users from the crypto community to adopt the Digital Yuan, many have expressed concerns that this could be a tool for surveillance on its citizens. Rather than saving the Digital Yuan to a wallet, the Chinese government advocates for spending the Yuan so as to jog the economy and experts have alluded to the fact that plans are in motion to enforce an expiration date for the Digital Yuan to discourage the saving culture.
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With CBDCs taking a center stage, it is safe to say that countries are in a race to get ahead of this before they get left behind. With world super powers being defined by their military prowess and the strength of their economies, CBDCs have created a new playground that could ensure a fair trial for all nations. While some economies and nations have already rolled out the beta versions of their CBDCs, there are more countries in the process of developing their own digital coins. As usual we will be in it to bring you the latest, you just have to stay tuned.
