China’s digital currency push faces uphill battle

At Beijing Winter Games venues, China's digital currency has been designated as an official payment method.

China has been putting an emphasis on promoting the use of this digital yuan, or e-CNY.

To pay in the digital currency, the official smartphone app or a physical e-CNY card can be used.

China is trying to show off to the world that the country's digital currency is in the stage of practical use, but private smartphone payment systems are already widespread within the country, making it difficult to expand use of e-CNY.

"It feels the same as using WeChat Pay or other such systems," said a 21-year-old female university student Saturday who volunteered for the Beijing Olympics, referring to a popular smartphone payment system in China.

She had just bought Olympic goods with digital yuan at an official shop in the Main Media Center in Beijing.

To pay via the official app, users need to select a bank that supports the e-CNY service, then register their mobile phone number and password, before charging the digital yuan in advance. Payment is completed with a scan of their QR code at the register.

The physical e-CNY card has been recommended for foreign visitors in China for a short time who do not have ID issued by China nor bank accounts in the country. Users of the card scan their passport at a designated automatic exchange machine and insert foreign currency to receive the card charged in e-CNY. Then they just tap the card to pay.

In October 2020, China's central bank, the People's Bank of China, started a pilot program involving the public. Currently, the programs are underway in 12 cities, including Beijing and Hebei Province's Zhangjiakou, where Winter Games venues are situated.

China, however, is struggling to increase the number of e-CNY users. The cumulative amount of digital yuan transactions was 87.5 billion yuan (about ¥1.6 trillion) at the end of 2021, but this was only 0.02% of the transaction value of mobile payment services in 2020.