Pilot version of a wallet app launched by China’s central bank to expand usage of its own digital currency, the digital yuan
China’s central bank has launched a pilot version of a wallet app in an effort to expanded usage of the digital version of China’s sovereign currency.
The digital yuan or e-CNY is a digital version of China’s sovereign currency and has been in the works since 2014. It should be noted that this is not a cryptocurrency such as bitcoin, but is instead issued and controlled by the People’s Bank of China, CNBC reported.
China it should be remembered officially banned cryptocurrencies in 2019, but began taking stronger measures against crypto transactions and mining activities in May 2021.
In June last year China told banks and payment platforms in the country to stop facilitating crypto transactions and issued bans for crypto miners.
Then in September China’s central bank said it considered all cryptocurrency transactions “illegal”, which was the country’s strongest indication yet of its hard line against digital tokens such as Bitcoin.
At the time the bank also indicated that it was also illegal for overseas exchanges to provide virtual currency transactions to Chinese citizens.
The bank also said China would develop “new systems” to counter the risks posed by cryptocurrencies.
Fast forward three months to January 2022, and now China’s central bank has launched a pilot version of a wallet app for the digital yuan in a push to expand its usage to more people, CNBC reported.
The app is available on China’s Android app stores and Apple’s app store.
It allows users to open a digital yuan wallet and spend the currency.
China has so far reportedly conducted a number of trials around the country in the form of lotteries where users in certain cities have been given a small amount of digital currency to spend.
Some retailers, such as e-commerce company JD.com, have accepted it as payment in the past year, CNBC reported.
But it is important to note that China’s digital yuan has not yet officially been rolled out nationally and there is no timeline for this.
The new app allows Chinese users in ten locations such as Shanghai and Beijing to use it. Before that, the app had only been available to select users who were invited to use it.
But now everyone can download the app.
However, the e-CNY app is likely to face stiff competition from China’s two dominant digital payment apps, namely Ant Group’s Alipay and Tencent’s WeChat.