According to Nikkie Asia, China has expanded the use of digital yuan in 23 cities across the country, accounting for one-fifth of the world’s most populous nation. 

It has been eight years since China’s central bank initiated the pilot digital yuan program, but it still faces difficulty convincing people to use the platform. 

The key reason users are not interested much in digital yuan is because they are familiar with popular mobile payment apps Alipay and WeChatPay, and they find no difference between it and those apps.

Nikkie Asia estimated that about 80% of all retail purchases in China are made through the most common mobile payment apps of WeChatPay and Alipay.

The digital yuan has two key advantages over current mobile payment apps. First, there are no fees for users when making payments via the platform. Second, there is no need to have an internet connection for transactions to be made.

Despite its widespread pushing of the program, still, no clear timeline is set for a full launch of the digital yuan.

Experts said that China’s introduction of the digital yuan is an effort to challenge U.S. dollar dominance. 

China started developing digital currency in 2014. China’s central bank in 2017 set up a digital currency research institute. 

The Wall Street Journal reported that China’s central bank has been carrying out small-scale rollout trials of digital yuan since late 2019.

In April 2020, China’s central bank and its Monetary Research Institute announced that they would launch the first closed test of the digital yuan in Shenzhen, Beijing and other key cities. Beginning in May 2020, some government employees’ wages were partially paid in digital yuan.

Since early 2022, banking officials have stepped up to promote the digital yuan on a wider scale. Apollo News said that as of last year, there had been about 8 million digital yuan trial points of sale in China, with 216 million digital wallets on the central bank’s app and transaction amounts of nearly 90 billion yuan or 13 billion dollars.

According to the Wall Street Journal, during the Beijing Winter Olympics, the volume of transactions using digital yuan exceeded that of Visa cards for one day. At this sport event Beijing introduced trials of soft wallets and hard wallets, and other transaction methods using its digital currency.

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