<p>A senior official from the People’s Bank of China (PBOC) has underscored the importance of making China’s digital yuan, commonly referred to as the e-CNY, accessible in all retail payment scenarios within China.</p><h2 id="header-0">Streamlining retail e-CNY payments</h2><p>The remarks were delivered by Changchun Mu, Head of the Digital Currency Research Institute, during a trade forum in Beijing. Mu emphasized the need for standardizing QR codes in payment systems, particularly those dominated by giants like WeChat Pay and Alipay.</p><p>Local media<a href="https://www.thepaper.cn/newsDetail_forward_24472433" rel="noopener noreferrer nofollow"> reported</a> on Sunday that the central bank official highlighted that various wallet providers, including WeChat, Alipay, commercial banks with mobile banking apps, and other payment apps associated with e-CNY operations, must remain vigilant about complying with relevant financial regulations and obtaining the necessary licenses. He stressed that the initial step in this process should involve the adoption of the digital yuan as the preferred payment method for all retail transactions.</p><h2 id="header-1">Standardizing QR code payments</h2><p>Mu explained that in the short term, authorities can start by unifying QR code standards on a technical level to achieve barcode interoperability. In the long run, he suggested that they will steadily implement the upgrade of payment tools.</p><p>The move towards standardizing QR code payments aligns with the central bank’s commitment from the previous year to promote universal QR payment codes. This initiative aims to allow consumers to make payments by scanning a unified barcode. Currently, QR code payment systems are widely prevalent in China, with WeChat Pay and Alipay being dominant players.</p><p>The PBOC has been actively testing the e-CNY, having introduced a pilot app in January 2022. The digital yuan pilot programs, initiated in late 2019, have expanded to encompass at least 26 locations across 17 provincial-level cities and regions, including major cities like Beijing, Shanghai, Shenzhen, and Suzhou, according to state media Xinhua.</p><p>The extent of China’s promotion of its digital yuan has been unmatched despite the fact that most central banks globally have had ongoing central bank digital currency-related (CBDC) projects open for a number of years already.</p><p>Recent months have seen the launch of a whole host of initiatives to further the use of the CBDC. These initiatives have included<a href="https://medium.com/&#64;coinness.gl/chinas-jiangsu-province-integrates-digital-yuan-into-education-system-d0fe47141e1a" rel="noopener noreferrer nofollow"> integration</a> of the currency into the education system in Jiangsu province, the<a href="https://medium.com/&#64;coinness.gl/china-launches-digital-yuan-atms-in-hainan-resort-city-of-sanya-3d77a7b6baf1" rel="noopener noreferrer nofollow"> installation</a> of digital yuan ATMs in Hainan, among many other such projects, and<a href="https://medium.com/&#64;coinness.gl/china-to-pay-state-employees-in-digital-yuan-2a2fdce81a97" rel="noopener noreferrer nofollow"> paying</a> state employees with the currency in Changshu. That said, despite these efforts, widespread adoption of the e-CNY remains a work in progress.</p><h2 id="header-2">Bringing about e-CNY integration</h2><p>Mu also emphasized that the existing interbank payment and settlement systems function effectively, indicating that there is no immediate need to replace them with the CBDC system. Instead, he suggested that seamless integration could be achieved by ensuring comprehensive interoperability between the e-CNY and existing electronic payment tools and commercial bank deposit systems.</p><p>Moreover, at a wholesale level, Mu proposed the use of the digital yuan for settlement within the financial market infrastructure. Smart contracts could also be leveraged for such activities, thereby enhancing efficiency in wholesale payments.</p><p>Mu’s remarks underscore the Chinese central bank’s determination in advancing the development and adoption of the digital yuan while ensuring it remains integrated into the existing financial ecosystem.</p>

Chinese Central Bank Official Emphasizes Need for Digital Yuan Retail Payments

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