The total volume of transactions in e-CNY over two years amounted to just over 100 billion yuan ($14 billion), which is “not ideal”. This conclusion was reached by the former director of research at the PBOC, a finance professor at Tsinghua University, Se Ping, according to Caixin.
“The use of [CBDC] was low, extremely inactive,” — said the official.
In the system there were 261 million unique digital wallets, despite improvements in their functionality and the expansion of pilot projects, he added.
For comparison, on that date, 903.6 million people in China used mobile payments, according to a China UnionPay report.
According to Se Ping, authorities should revisit the use cases for the e-CNY. In addition to the current cash replacement, it should, for instance, enable payments for financial products or connect to a broader set of payment platforms.
The former official compared the CBDC with China’s popular systems WeChat Pay, Alipay and QQ Wallet, which allow investments, lending, or loans. In his words, they “have formed the structure of the payments market that meets the everyday needs of citizens”.
Some third-party financial apps are compatible with the e-CNY. The former analyst noted that people are accustomed to using the original service, and changing this pattern of behaviour is “difficult”.
China has been testing the e-CNY for three years. The trials were conducted in Shenzhen, Suzhou, Xiong’an, Shanghai, Hainan, Changsha, Xi’an, Qingdao, Dalian and the site of the Winter Olympic Games.
In July 2021, Chengdu authorities, the capital of Sichuan, tested the digital yuan with programmed use cases.
In spring 2022, former head of the People’s Bank of China Zhou Xiaochuan noted that the e-CNY is primarily intended for the population and merchants, not to replace SWIFT or “turn currency into a weapon.”
The former official then added that for cross-border payments the digital yuan could be adapted in the future, but even then the CBDC would still be oriented toward retail users.
Earlier, media reported on the expansion of e-CNY testing to four provinces.
In November, Shanghai authorities distributed CBDC among 7 million residents through a red-envelope lottery.