Chinese CBDC wallet draws on centuries of tradition to speed up adoption

Chinese CBDC wallet draws on centuries of tradition to speed up adoption

China’s central bank digital currency (CBDC) yuan wallet app has introduced users to send money in an electronic version of traditional “red packets” to try and attract new users.

The new feature was released over the weekend, about a month before the Chinese New Year on January 22nd. reported South China Morning Post, December 26.

“red packets” hongbao in China, it is traditionally used to give money on Chinese New Year and other holidays as a gesture of good luck. The growing use of digital payments has given rise to virtual red envelopes offered by popular local services such as WeChat Pay and Alipay.

The e-CNY app reportedly allows you to send a red packet to just one person, or you can organize a “lucky draw” for a group of people who will receive a random amount from a pool of funds, both WeChat Pay and Alipay have a similar feature.

Users can choose the cover of the package with wishes for the new year or birthdays, as well as wishes for a “prosperous China”.

Digital yuan transactions passed the $14 billion (100 billion yuan) threshold on October 10, up just 14% from the $12 billion (87.6 billion yuan) reported by the People’s Bank of China at the end of 2021.

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December 18 report in China Workers’ Daily reported e-CNY routes will be expanded to Jinan, Nanning, Fangchenggang and Kunming. Tests earlier in September, it expanded to four of the country’s provinces, including its most populous Guangdong.

Despite the rapid expansion of trials by the government, the last recorded e-CNY wallet user base was in January 2022, when 261 million users created a digital wallet.

The Chinese government may have to use WeChat Pay and Alipay to incentivize the adoption of its digital yuan.

Both services accept e-CNY: WeChat had 1.3 monthly active users in the September quarter, and Alipay had over 1 billion annual active users in the fiscal year ending August 17, 2020, according to financial reports.