Beautiful Virgin Islands

Wednesday, Sep 03, 2025

Digital yuan will not compete with WeChat Pay or Alipay

Digital yuan will not compete with WeChat Pay or Alipay

China’s digital yuan will not compete with private apps like WeChat Pay and Alipay, but it may have to contend with counterfeit digital wallets.

China’s Digital Currency Electronic Payment (DCEP) will not compete with WeChat Pay and Alipay, the head of the programme clarified for the first time on Sunday. The two digital wallets had a combined 94 per cent share of the country’s mobile payments industry in the second quarter, according to iResearch.

“They don’t belong to the same dimension. WeChat and Alipay are wallets, while the digital yuan is the money in the wallet,” said Mu Changchun, the head of the research institute for digital currency at the People’s Bank of China. He spoke in Shanghai at the 2nd Bund Summit, co-organised by the China Finance 40 Forum.

However, the digital yuan is distributed through an app that some consumers may choose to use instead of private mobile wallets, according to Wang Leilei, a fintech consultant at the Shanghai-based financial industry consultancy Kapronasia. She said participants of a pilot run in Shenzhen earlier this month were asked to download a specific app for DCEP.

“If the digital money is to be allocated through the app, some people may switch to the app, while others may transfer it to WeChat or Alipay. It depends on consumers and the use case,” Wang said.

Alipay is owned by Ant Financial, an affiliate of Alibaba, which owns the South China Morning Post.


Mu Changchun, the head of the People’s Bank of China’s research institute for digital currency, at the 2nd Bund Summit.


However people decide to use the new digital yuan, though, it still faces an age-old problem similar to cash: counterfeiting.

“We have found counterfeit digital yuan wallets on the market,” Mu said at the summit without providing any additional details.

The central bank is currently running its first DCEP trials with designated institutions and merchants in China’s southern tech hub of Shenzhen. The city concluded the country’s largest test of the sovereign digital currency this month after local authorities gave out 10 million yuan (US$1.5 million) to more than 47,500 people by lottery.

The digital yuan was awarded in the form of “red packets” each containing 200 yuan that could be spent in designated shops. A total of 1.9 million residents signed up to take part in the giveaway.

Wang, from Kapronasia, noted that users who are not familiar with DCEP may be targeted by fraudsters. Consumers could be tricked into taking part in fraudulent digital currency schemes that have nothing to do with the central bank, she said. The fake currency would not be able to be used at authorised merchants.

PBOC’s Mu said reducing counterfeiting will require coordination between the different sides tasked with bringing the digital currency to ordinary users.

The DCEP currently operates on two tiers. The first involves the central bank, which issues the digital yuan. The second involves designated institutions such as commercial banks, which distribute the currency to users.

Digital wallets will also have to form their own unique visual identity and functions, Mu said.

Connecting designated operators and reducing payment barriers will require formulating business, technical, security and application standards, he said during his speech. He also noted that operators should work on developing their own features, including more payment and financial products.

Mu also underlined the need for “centralised supervision” from the central bank, creating a clear distinction between the digital yuan and private cryptocurrencies like the Facebook-backed Libra, to which it is sometimes compared. Supervision will allow the DCEP to “resist the erosion of cryptoassets and global stablecoins,” he said. Stablecoins are digital currencies that have their value pegged to other assets like commodities or national currencies.

Mu’s emphasis on centralisation also separates the digital yuan from cryptocurrencies like bitcoin, which run on a decentralised blockchain over a peer-to-peer network. Mu said last year that the PBOC is not looking at just one technical approach to managing its new digital currency, suggesting blockchain could be one of its tools. Whether the central bank uses it, Wang said commercial banks and other distributors can still choose to use the technology.

Newsletter

Related Articles

Beautiful Virgin Islands
0:00
0:00
Close
Germany in Turmoil: Ukrainian Teenage Girl Pushed to Death by Illegal Iraqi Migrant
United Krack down on human rights: Graham Linehan Arrested at Heathrow Over Three X Posts, Hospitalised, Released on Bail with Posting Ban
Asian and Middle Eastern Investors Avoid US Markets
Ray Dalio Warns of US Shift to Autocracy
Eurozone Inflation Rises to 2.1% in August
Russia and China Sign New Gas Pipeline Deal
China's Robotics Industry Fuels Export Surge
Suntory Chairman Resigns After Police Probe
Gold Price Hits New All-Time Record
Von der Leyen's Plane Hit by Suspected Russian GPS Interference in an Incident Believed to Be Caused by Russia or by Pro-Peace or by Anti-Corruption European Activists
UK Fintechs Explore Buying US Banks
Greece Suspends 5% of Schools as Birth Rate Drops
Apollo to Launch $5 Billion Sports Investment Vehicle
Bolsonaro Trial Nears Close Amid US-Brazil Tension
European Banks Push for Lower Cross-Border Barriers
Poland's Offshore Wind Sector Attracts Investors
Nvidia Reveals: Two Mystery Customers Account for About 40% of Revenue
Woody Allen: "I Would Be Happy to Direct Trump Again in a Film"
Pickles are the latest craze among Generation Z in the United States.
Deadline Day Delivers Record £125m Isak Move and Donnarumma to City
Nestlé Removes CEO Laurent Freixe Following Undisclosed Relationship with Subordinate
Giuliani Seriously Injured in Accident – Trump to Award Him the Presidential Medal of Freedom
EU is getting aggressive: Four AfD Candidates Die Unexpectedly Ahead of North Rhine-Westphalia Local Elections
Lula and Putin Hold Strategic BRICS Discussions Ahead of Trump–Putin Summit
WhatsApp is rolling out a feature that looks a lot like Telegram.
Investigations Reveal Rise in ‘Sex-for-Rent’ Listings Across Canada Exploiting Vulnerable Tenants
Chinese and Indian Leaders Pursue Amity Amid Global Shifts
European Union Plans for Ukraine Deployment
ECB Warns Against Inflation Complacency
Concerns Over North Cyprus Casino Development
Shipping Companies Look Beyond Chinese Finance
Rural Exodus Fueling European Wildfires
China Hosts Major Security Meeting
Chinese Police Successfully Recover Family's Savings from Livestream Purchases
Germany Marks a Decade Since Migrant Wave with Divisions, Success Stories, and Political Shifts
Liverpool Defeat Arsenal 1–0 with Szoboszlai Free-Kick to Stay Top of Premier League
Prince Harry and King Charles to Meet in First Reunion After 20 Months
Chinese Stock Market Rally Fueled by Domestic Investors
Israeli Airstrike in Yemen Kills Houthi Prime Minister
Ukrainian Nationalist Politician Andriy Parubiy Assassinated in Lviv
Corporate America Cuts Middle Management as Bosses Take On Triple the Workload
Parents Sue OpenAI After Teen’s Death, Alleging ChatGPT Encouraged Suicide
Amazon Faces Lawsuit Over 'Buy' Label on Digital Streaming Content
Federal Reserve Independence Questioned Amid Trump’s Push to Reshape Central Bank
British Politics Faces Tumultuous Autumn After Summer of Rebellions and Rising Farage Momentum
US Appeals Court Rules Against Most Trump-Era Tariffs
UK Sought Broad Access to Apple Users’ Data, Court Filing Reveals
UK Bank Shares Dive Over Potential Tax on Sector
Germany’s Auto Industry Sheds 51,500 Jobs in First Half of 2025 Amid Deepening Crisis
Bruce Willis Relocated Due to Advanced Dementia
×