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China’s Digital Currency, the Digital Yuan Comes to WeChat

China’s central bank digital currency, the Digital Yuan, has been integrated with Tencent’s flagship messaging app WeChat and appears as a payment option when users use the super app.

WeChat boasts over 1.2 billion monthly active users, which is popular in China and also popular outside of China.

Currently, only users in Chinese cities where the Digital Yuan is being trialled can choose to pay with the currency. But that group of cities is steadily expanding – this week, the People’s Bank of China announced 11 cities have been added to the test. The collective populations of those cities exceed 80 million – a total that would rank as the 20th most populous country in the world.

WeChat boasts over 1.2 billion monthly active users
WeChat boasts over 1.2 billion monthly active users

Making the digital yuan available to so many people is a clear sign that China wants the digital currency to be widely used.

Integrating it with WeChat makes even more sense. Cash is the medium of communication in China, and app payments make up the majority of transactions.

Alibaba and Tencent dominate such payments, but Beijing is not entirely thrilled that web giants are playing such a central role in Chinese life. There is currently no indication that Beijing plans to restrict its payment services, but the addition of the digital yuan as an option means the People’s Bank of China will win. location in the tools that most Chinese people use for their daily shopping.

The bank will also have a foothold abroad, as many people around the world use WeChat. The overseas Chinese community is fully interactive with the app, which is used as a campaigning tool outside of China.

If integration with WeChat one day sees the Digital Yuan being used outside of China, Beijing will be delighted. It hopes the currency can match the popularity of the US Dollar in international trade.

Central Bank digital currencies such as the Digital Yuan are designed to replace cash and provide convenience for digital payments while preserving the anonymity inherent in the exchange of coins or bills. However, US senators have warned that the digital yuan allows Beijing to survey users – an allegation that, if true, makes the currency less attractive.