Cumulative e-CNY Transactions Only Crossed $14 Billion In Two Years

Key Points:

• Xie Ping, a former People’s Bank of China research director, made critical public comments about China’s central bank digital currency (e-CNY) at a recent university conference.
• At a recent university conference, Xie publicly criticized the country’s central bank’s digital currency.
• Xie pointed out that the total value of digital yuan transactions had only surpassed $14 billion two years after the introduction. He claimed that the outcomes were not optimal.

According to a former official of the People’s Bank of China (PBOC), the nation’s central bank, on Wednesday, the digital currency (CBDC), known as e-CNY, is not widely used in China, financial news source Caixin reported on December 28.

At a recent academic conference, Xie Ping, a former PBOC research director and current finance professor at Tsinghua University, publicly criticized China’s CBDC.

“The cumulative circulation of the digital yuan in the two years of the trial has been only 100 billion yuan ($14 billion),” he said.

He claims that the utilization has been quite low and inactive.

Xie told a conference that the use of the e-CNY needed to be expanded after expressing unhappiness with the outcome of a trial in a few provinces and cities. He expressed:

“The results are not ideal.”

Only 261 million users have created an e-CNY wallet, according to a January PBOC report, despite the government’s quick extension of the trials and additional wallet features in an effort to lure consumers. In contrast, a 2021 China UnionPay report estimates that 903.6 million Chinese consumers use mobile payments.

“What needs to change is the digital yuan acting only as a substitute for cash and only for consumption,” Xie said.

He contrasted the digital yuan with other third-party payment platforms used in the nation, including WeChat Pay, Alipay, and QQ Wallet, which all support lending, borrowing, and investing. Despite being e-CNY compliant, several third-party banking apps are rarely used.

“Cash, bank cards and China’s third-party payment mechanisms have formed a payment market structure that has met needs for daily consumption. The common people are used to it, and changing it is difficult,” he said.

Recently, to promote the use of e-CNY, China’s wallet app e-CNY for its CBDC added a function allowing users to send money in an electronic rendition of traditional “red packets” in an effort to draw in new users.

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