China’s Central Bank Aims for Digital Yuan to Dominate Retail Payments

A Chinese central bank official announced on Sunday that the digital yuan, China’s experimental central bank digital currency (CBDC), should be accessible for all types of retail payments. Changchun Mu, who leads the digital currency research at the People’s Bank of China (PBOC), made these comments at a trade forum in Beijing.

According to local news outlet The Paper, Mu emphasized that payment platforms like WeChat, Alipay, and various mobile banking apps from commercial banks must adhere to regulatory standards and acquire the necessary financial licenses.

“The first move in evolving our payment systems is to make the digital yuan the go-to option for all retail transactions,” Mu stated. He suggested that in the short term, a unified QR code standard could be established for compatibility across different payment platforms. “As we look ahead, we’ll methodically roll out upgrades to our payment tools,” he added.

This follows the central bank’s promise last year to standardize QR payment codes, making it easier for consumers to make payments through a single barcode system. QR payments, primarily via WeChat Pay and Alipay, are already common in China.

The People’s Bank of China started trialing the e-CNY in January 2022, after initiating pilot programs back in late 2019. According to state-run media Xinhua, these trials have now extended to at least 26 places in 17 provinces and cities, including Beijing, Shanghai, Shenzhen, and Suzhou. Despite these efforts, the digital yuan is yet to see mass adoption and is still in the testing phase across various parts of China.

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