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China’s ambitious e-CNY plan faces a giant hurdle: winning over 1 billion consumers at home
- More than three years after China’s central bank started digital currency trials, adoption in one of the initial test beds, Suzhou, remains lethargic
- Suzhou data show that 130 million yuan in e-CNY were used to settle various utility bills and charges for livelihood services in 2022
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When the People’s Bank of China (PBOC) launched pilot trials for the e-CNY at the end of 2019, it selected cities based on factors such as major national development and coordinated regional expansion strategies, as well as location-specific industrial and economic features.
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Suzhou, the most populous city in eastern Jiangsu province, ticked all the right boxes just like the other initial test sites – Shenzhen, Xiongan and Chengdu. With an economy built on a large manufacturing sector, Suzhou has well-established development zones, an extensive transport network and business-friendly policies that have made it one of the country’s foremost destinations for foreign investment.
Fast-forward to the present and the digital yuan’s adoption in Suzhou, like in other pilot cities, appears to have slowed along with China’s economy in the past few years.
A recent visit by the South China Morning Post to Suzhou Centre Mall, the city’s largest and most popular shopping venue, found a listless state of e-CNY adoption amid the more prevalent use of other digital payment systems. But that has not stopped the local government from targeting an ambitious post-pandemic goal this year.
Similar to most stores nationwide, shops in the mall accept payments via Ant Group platform Alipay or Tencent Holdings’ WeChat Pay. Few establishments put up labels at cashier’s desks to indicate that China’s sovereign digital currency was also accepted. Ant Group is the financial technology affiliate of Alibaba Group Holding, which owns the Post.
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Alipay and WeChat Pay each have hundred of millions of daily active users on the mainland after amassing millions of features over the years between them. The two super apps each offer a myriad of services, from retailing and catering to medical services, that ensure convenience in their respective ecosystems to keep subscribers from looking to engage with other platforms. The e-CNY, in effect, became a one-time giveaway that offered consumers neither additional convenience nor any compelling reason to be regular users.
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