The e-CNY was the only alternative to Visa in the Olympic venues, which was the official sponsor of the Games. The e-CNY, however, functions as legal tender, just like cash, and its adoption is key to creating more competition in China’s payments market. Both these apps also offer payments in digital yuan, but users must first have the e-CNY app to transfer the currency into their digital wallets for Ant’s MyBank or Tencent’s WeBank. The U.S. approach centers on fostering an ecosystem where private companies can innovate in both AI and cryptocurrency spaces while operating within clear regulatory boundaries. This includes developing comprehensive frameworks that address the intersection of AI and crypto technologies, particularly in areas like algorithmic trading and smart contract automation. The strategy also emphasizes the development of AI-enhanced, dollar-backed stablecoins that could serve as a bridge between traditional and digital finance while reinforcing U.S. currency dominance.
In late December, the industry giant moved ahead by granting e-CNY bonuses to those who refrain from using disposable dishware and bring their own bags when shopping. A growing number of brick-and-mortar stores in Beijing and Shanghai, as well as online retailers like JD, are getting themselves connected to e-CNY payments. Successfully riding the digitalization tide in 2021 is the Chinese yuan, which is attracting more users to its digital version.
China’s efforts are among the most advanced globally, and the country has been running various trials and pilot schemes of different payment scenarios since last year. The most important key figures provide you with a compact summary of the topic of “Digital payments in China” and take you straight to the corresponding statistics. Although China is pushing forward its experiment in creating a Chinese digital yuan, there is no official date about when it will be released nationwide. While addressing to the 30th Anniversary Conference of the Bank of Finland Institute for Emerging Economics in early November, Yi Gang, governor of the People’s Bank of China, said that the design and use of digital yuan should be further advanced. Our flagship Central Bank Digital Currency (CBDC) Tracker takes you inside the rapid evolution of money all over the world. The interactive database now tracks over 130 countries— triple the number of countries we first identified as being active in CBDC development in 2020.
President Donald Trump’s approach to both AI and cryptocurrencies reflects a broader strategy of maintaining American technological leadership while protecting national interests. While publicly skeptical of cryptocurrencies, calling Bitcoin “a scam against the dollar” in 2021, his administration fostered an environment that allowed both AI and crypto innovation to flourish under regulatory oversight. Trump’s policies helped establish the U.S. as a major hub for both AI development and crypto trading, particularly after China’s crypto crackdown.
There is a tradeoff between the anonymity requirements of the digital wallets, and balance and transaction limits. Wallets with lower balance and transaction limits can keep their anonymity, but upgrades to transaction limits require higher identification and know your customer (KYC) standards. For example, to obtain a wallet with a balance limit of 10,000 e-CNY, transaction limits of 2,000 e-CNY per transaction and 5,000 e-CNY per day, customers only need to provide a registered phone number. However, upgrading to higher balance, as well as daily and individual transaction limits, requires ID and banking information. Mu Changchun cited China’s new Personal Data Protection law, which would help keep the anonymity of such financial data.
Recent discussions between Trump and these tech leaders have highlighted the importance of private sector innovation in maintaining America’s technological edge. Musk’s warnings about AI safety and Ellison’s emphasis on American AI superiority have resonated with Trump’s vision of technological nationalism. The technological competition between the United States and China has entered a new phase, with artificial intelligence and cryptocurrencies emerging as twin battlegrounds that could reshape global economic power dynamics. Recent developments in both sectors suggest that China’s technological capabilities may be advancing faster than previously thought, challenging U.S. dominance in unexpected ways. The rise in NFTs in China is saving the Chinese crypto community from being completely eliminated.
China’s innovations surrounding the e-CNY are changing the financial landscape at home and forcing its competitors abroad to acknowledge China as a new powerful, innovative force in the digital currency space. While the Central Bank desires scalability and increased adoption of e-CNY, people need more incentive to switch from popular digital wallets such as WeChat and Alipay. Therefore, the People’s Bank of China is using a mix of persuasion and arm-twisting to roll out the digital currency. It seeks to get citizens to participate in the e-CNY project by playing the safety and security card.8 It also uses promotional discounts to encourage increased use of e-CNY. The state-funded e-CNY network also offers businesses lower fees than the more established Alipay and TenPay network platforms.
The figure is nearly four times the 1.8 trillion yuan recorded by the end of June 2023, according to data from the People’s Bank of China (PBOC). The above is for general info purposes only and should not be interpreted as professional advice. Please seek independent legal, financial, tax, or other advice specific to your particular situation. The global financial community also remains wary of China’s broader strategic ambitions, which could hinder the e-CNY’s acceptance and adoption.
The People’s Bank of China has announced a goal of having more than a billion users before any other country can take substantial steps toward developing a central bank digital currency of its own (Hoffman et al., 2020). The People’s Bank of China can also implement monetary policy while identifying problem areas to help devise policies to ensure price and financial stability (Aysan et al., 2014, 2015). Furthermore, unlike paper currency, digital currency helps track and monitor the use of currency after issuance.
In addition, there is talk of converting government and state-owned enterprise payrolls to e-CNY, forcing its increased use within China. More recently, the State Administration for Market Regulation (China’s antitrust regulator) has also launched regulatory actions against monopolies and e-commerce platforms to hasten the adoption of e-CNY. Following this, Tencent and Ant Group’s bank affiliates began fast-tracking the use of e-CNY by enabling the purchase of the digital yuan. As large Chinese tech companies start partnering with state-owned banks in pilot projects facilitating the consumer use of the e-CNY, this could impact the data gathered by Alipay and WeChat Pay and reduce their market share in payment platforms. Currently, e-CNY can only be purchased through China’s six large state-owned banks and Tencent and Ant Group bank affiliates that control China’s two leading digital retail payment platforms. E-CNY users may be individuals or corporations, and each of these “wallet-holders” has different transaction limits.
