China's Digital Yuan Isn't Taking Off Despite State Employee Salary Trial: Report
Many consumers prefer to use online payment tools such as Alipay and WeChat Pay.
The digital yuan is fraught with privacy concerns as it incorporates elements of blockchain technology so transactions are all theoretically traceable.
China's digital yuan, also known as e-CNY, is failing to catch on during a trial in which state employees receive their salary in the central bank digital currency (CBDC), according to a report by the South China Morning Post (SCMP).
Most of the early recipients immediately transfer the digital yuan balances to their bank accounts to spend as cash, the SCMP reported.
“I prefer not to keep the money in the e-CNY app, because there’s no interest if I leave it there,” Sammy Lin, one participant in the pilot, said. “There are also not so many places, online or offline, where I can use the e-yuan.”
Almost all developed countries are at least exploring the development of a CBDC as a digital complement to cash, with China the most advanced. The e-CNY has been undergoing trials across China since 2019, though there is no timeline for a national launch.
The CBDC is also fraught with privacy concerns as it incorporates elements of blockchain technology so transactions are all theoretically traceable.
That means consumers prefer to use online payment tools such as Alipay and WeChat Pay. Paying in physical cash also remains an option, though this is far less prevalent.
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