China has launched a smartphone app for making payments and transfers with the digital yuan, as the country plows ahead with tests of its Central Bank digital currency.
The e-CNY app became available on app distribution platforms for Android and iOS users in China on Tuesday.
The app is now open to users in 12 cities and regions including Shenzhen, Suzhou, Chengdu, and Shanghai, as well as the hosts for the upcoming Winter Olympic Games, Beijing and Zhangjiakou. Once the app is granted permission to check the phone’s location, eligible users in those places can sign up for an account and start using the digital wallet in the app.
During signup, users will need to choose one of nine partner banks to link with their digital wallet. The partners are the country’s “Big Six” state-owned commercial banks, including Bank of China Ltd. and China Construction Bank Corp.; two online banks — Tencent Holdings Ltd.-backed WeBank and Ant Group Co. Ltd.-operated MYbank; and China Merchants Bank Co. Ltd. Users don’t have to have an existing account with any of the banks.
Digital-yuan wallet owners can transfer money between their bank accounts and the wallets and to other e-CNY users. They can also make online and offline payments in ways similar to how they use Alipay and WeChat Pay, the dominant mobile payment systems in China.
Depending on the level of ease for signing up, four types of digital-yuan wallets with varying balance and payment caps are available. The type 4 wallet, requiring only a cellphone number, has the strictest balance and payment limits. Its maximum balance is 10,000 yuan ($1,573). A single payment cannot exceed 2,000 yuan, while daily payments can’t amount to more than 5,000 yuan and annual payments 50,000 yuan.
The balance and payment limits are raised with the type 3, 2 and 1 wallets, with cumulatively higher requirements each — namely inputting a Resident Identity Card number for type 3, linking an existing bank account for type 2, and visiting a bank in person for type 1.
This digital-yuan app was first unveiled to the public in October 2020, when participants in one Shenzhen district’s digital yuan pilot were given the ability to install it through a link sent directly to them.
People’s Bank of China (PBOC) Governor Yi Gang said in November that, at the current stage, the use of digital yuan would focus on domestic retail payments.
The central bank has been developing the digital yuan since 2014, when it formed a task force to develop a virtual legal tender, official information shows. Mu Changchun, head of the PBOC’s digital currency research institute, said in early November last year that 140 million individual and 10 million corporate digital-yuan wallets had been created, and transactions in the digital currency reached around 62 billion yuan. No date has been announced for a full rollout.
Mu has repeatedly stated that the digital yuan is a replacement for cash and centrally controlled by the PBOC.
Source: Caixin Global