Social media giant WeChat backs China’s CBDC, platform expected to boost adoption

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Chinese social media giant WeChat has said it will support the digital yuan, a move that is expected to increase the number of Chinese residents using the central bank’s digital currency (CBDC). WeChat’s support for the digital yuan could use the digital currency for social media’s 800 million active users.

New app provides access to CBDC

WeChat, one of China’s largest messaging and payment apps, will reportedly support China’s CBDC digital yuan. The addition of CBDC to social platforms is expected to increase the adoption rate of the digital yuan.

The messaging giant’s decision to back a CBDC comes shortly after the central bank launched its e-cny app, which makes the digital yuan available to users in certain regions and cities in China.

However, as Report In a note to Coinrivet, WeChat’s announcement and the inclusion of Alibaba’s Alipay in the digital currency ecosystem suggest that the e-cny app alone may not achieve the central bank’s goal of getting more Chinese to use CBDC.

The reason why the central bank cooperates with WeChat and Alipay

In support of this claim, the report quoted Linghao Bao, an analyst at consulting firm Trivium China, as saying he believed the central bank’s decision to include the two internet giants was justified. He said:

Chinese consumers are so locked into WeChat Pay and Alipay that it is unrealistic to convince them to switch to the new mobile payment app. Therefore, it makes sense for the central bank to cooperate with WeChat Pay and Alipay, rather than acting alone.

WeChat’s support for the digital yuan adds to a growing list of use cases for social media apps, which already includes payment service WeChat Pay. The social media giant’s addition of CBDC to payment services could also enable the digital currency to reach WeChat’s roughly 800 million active users.

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Terence Chimwala

Terence Zimwara is an award-winning journalist, author and author from Zimbabwe. He has written extensively about the economic woes of some African countries and how digital currencies can provide an escape route for Africans.