WeChat, China’s biggest messaging and payment app, has said it will support the digital yuan.
The move by the Tencent-owned company to back the country’s sovereign digital currency could provide the project with a huge boost if people begin to use it for payments.
China has been working on the digital yuan since 2014, and WeChat is often dubbed a ‘super app’, owing to the number of services connected to it.
People can use messaging functions and make payments via WeChat Pay, but also hail taxis and order food.
WeChat Pay has more than 800 million active monthly users.
The People’s Bank of China keeps trying to expand usage of the digital yuan, and has recently launched an e-CNY app for users in several regions and cities in the country.
Through this app, anyone in those areas will be able to download and register to use nation’s digital currency.
Another Chinese payment app Alipay, run by Alibaba affiliate Ant Group, also began trialling digital yuan payments last year.
However, both applications now seem to be potential competitors to the digital yuan’s own app that PBOC could use.
Linghao Bao, analyst at consultancy Trivium China, said: “Chinese consumers are so locked in WeChat Pay and Alipay, it’s not realistic to convince them to switch to a new mobile payment app.
“So it makes sense for the central bank to team up with WeChat Pay and Alipay as opposed to doing it on its own.”
Disclaimer: The views and opinions expressed by the author should not be considered as financial advice. We do not give advice on financial products.