China’s Digital Currency Head Urges Unification and Adoption

  • The digital yuan should eventually be a payment option across ‘all retail scenarios’, said Mu Changchun
  • While pilot trials of e-CNY started in 2019, convincing Chinese consumers to use the digital currency has proved to be an uphill battle

China’s head of digital yuan is urging mobile payment providers such as WeChat Pay and Alipay to improve their interoperability and unify QR codes for e-CNY payments, as the People’s Bank of China (PBOC) aims to promote the country’s central bank digital currency (CBDC) across all retail use cases.

WeChat Pay and Alipay – operated by Tencent Holdings and Alibaba Group Holding respectively – and banking apps run by commercial banks, should unify the technical standards of their e-CNY payment QR codes in near term, and subsequently upgrade tools to support wide adoption of e-CNY, said Mu Changchun, head of the Digital Currency Research Institute, the central bank agency responsible for developing the digital yuan, at an industry forum on Sunday.

The digital yuan should eventually be a payment option across “all retail scenarios”, Mu said at the China International Fair for Trade in Services.

Mu defined retail e-CNY payments as day-to-day transactions involving individuals, companies, public institutions or government bodies, regardless of the transaction amount. Whereas wholesale payments refer to those that happen only between financial institutions, he said on Sunday.

Mu said that business models and regulatory models for the country’s payments market will not be changed by the roll-out of the digital yuan, while better payment options will lower costs for participants.

“A single, unified and standardised QR code that supports e-CNY payments as well as Alipay, WeChat Pay and existing electronic payment methods can incentivise more widespread use of e-CNY by making it more convenient for consumers to use, and for merchants to accept, e-CNY in the retail context,” said Andrew Fei, a partner at law firm King & Wood Mallesons in Hong Kong.

Mu’s comments are also aimed at nudging merchants to ready their support for e-CNY payments, according to Jie Hu, professor of practice at the Shanghai Advanced Institute of Finance at Shanghai Jiao Tong University.

“He is saying that all merchants should get ready, both in terms of their willingness and their tools, so that if customers want to pay with e-CNY, they must accept it,” Hu said.

While pilot trials of e-CNY started in 2019, convincing Chinese consumers to use the digital currency has proved to be an uphill battle, and authorities have repeatedly tapped China’s mobile payment giants to promote the country’s digital fiat money.

Alipay activated the e-CNY payment option on its platform in May 2021, while WeChat Pay followed suit in January 2022.

The e-CNY app also added WeChat Pay as its second “express payment” option in March, nearly three months after initially having Alipay as an option on its own app.

Greater efforts to promote e-CNY among all retail scenarios, however, could be seen as “a crossroads that sees WeChat Pay and Alipay steadily lose market share” as a result of standardised QR codes, said Matteo Giovannini, senior finance manager at Industrial and Commercial Bank of China.

Officials from the PBOC, though, have repeatedly said that e-CNY is designed to replace “notes and coins”, instead of mobile payments services such as Alipay and WeChat Pay.

Mu on Sunday also urged players to upgrade the settlement tools used in wholesale payments.

“Over the lifetime of China’s financial and settlement system development, many settlement systems have been created,” said Jack Poon, professor of practice at the School of Accounting and Finance at the Hong Kong Polytechnic University.

“The wholesale e-CNY goal was hopefully to replace and unify those settlement systems,” Poon said.

“This is the right thing to do. However, I do not think it will be easy, as many stakeholders may not want to do so for various reasons.” (Source:

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