From Winter Olympics to Asian Games, China to Sell e-CNY to World Again

After its usage at the 2022 Winter Olympics in Beijing, China seems to be preparing to extend its central bank digital currency (CBDC) pilot programme to yet another event of global relevance, the 19th Asian Games Hangzhou 2022. 

Slated for between September 10 and 25, six of the cities that will host the event are among the 11 included in the trial as disclosed by the People’s Bank of China (PBoC) last weekend. The six cities in Zhejiang province are Hangzhou, Ningbo, Wenzhou, Shaoxing, Jinhua, and Huzhou.

The province will also host the fourth Asian Para Games between October 9 and 15. 

During the WInter Olympics, the e-CNY was made available to foreign visitors on a trial basis for them to use either in the form of a hardware wallet or through the digital wallet app. It was one of the only three payment methods accepted at the venue. Approximately US$300,000 worth of payments were made daily using the digital currency during the global event, according to a PwC Global CBDC Index report. 

A repeat of this approach is likely at the Asian Games which is due to feature 40 sports with 526 events and is expected to see more than 7,000 athletes from 11 countries competing. 

China is way ahead of other advanced countries in the rollout of a CBDC, particularly the orderly release of the digital currency, and has been acting as a catalyst for several other countries, says Henri Arslanian, a senior advisor at PwC Hong Kong, in an interview. 

“To put things into perspective, last Friday, the PBoC released a report where it mentioned that it has conducted over 1.3 million use cases of the e-CNY that range from government services to token payments, transportation, and shopping,” Arslanian said. “There are over 21 million retail wallets and 3.5 million corporate wallets. To put things into perspective, the volume of transactions that has taken place has been over RMB34 billion (i.e. US$5.3 billion). This has put China ahead of pretty much any other economy from that perspective.”

A related CBDC development is the announcement by WeChat Pay, a major Chinese e-pay platform, to accept e-CNY as a payment option in all pilot areas as part of its effort to develop the digital currency’s ecosystem. 

WeChat says it “has now fully opened up support for the digital yuan in all pilot areas” adding that all that is needed is for the user to open the WeBank e-CNY wallet in their real name and they can use the e-CNY app or WeChat to make payments.

The e-CNY has been available through WeChat Pay and Alipay since January in certain pilot areas. The latest development is to enable WeChat’s over a billion users to make payments and transfer money directly within its platform using the e-CNY.

The PBoC has worked with commercial banks, telecom operators, and internet service providers in the past to test various use cases of the e-CNY as well as its systematic spread across the country. The PBoC has the potential to reach a large section of the Chinese population to join in the CBDC trial at the domestic level. However, the apex bank needs to work with traditional mobile payment platforms such as Alipay and WeChat Pay to increase its small percentage of users.