China To Marry Digital Yuan, Mobile Payment Apps

The People’s Bank of China says it will make an effort to further link the digital yuan to the country’s popular mobile payment apps.

As Bloomberg News reported Tuesday (Nov. 9), the bank wants to upgrade the digital currency’s “interoperability with existing payment tools” and “improve the e-CNY ecosystem,” PBOC Governor Yi Gang said at a panel run by the Bank of Finland Institute for Emerging Economies. E-CNY is the official name for the digital yuan.

Yi said the bank will create a management model for the e-CNY modeled after how cash and bank accounts are managed, while also improving on its privacy protections, anti-counterfeiting measures and efficiency.

The PBOC will also test the digital yuan’s impact on financial markets and monetary policy. The bank has been testing the digital currency throughout the country since last year, allowing citizens to use the e-CNY to purchase goods and services and pay for utilities and other bills.

Read more: China’s Central Bank: 10M Businesses, 140M People Using Digital Yuan

Last week, the PBOC announced that the use of e-CNY had jumped to 140 million personal accounts and 10 million business accounts. Mu Changchun, who heads the bank’s Digital Currency Institute, said pilot programs in more than 10 regions using the digital yuan hit 62 billion yuan (about $9.7 billion). He added that the volume of transactions totaled 150 million.

According to Bloomberg, the People’s Bank has worked with tech giants such as Ant Group and Inc to promote the use of digital currency. People and businesses in the pilot zones can access an e-CNY wallet through Ant’s Ali app.

Yi stressed that the digital yuan will mostly be used to fund retail transactions within China’s borders, with the PBOC continuing to supply cash. The bank is prepping a larger trial for February, when China hosts the 2022 Winter Olympics in Beijing, potentially allowing foreign athletes to use the digital currency.