China's Digital Yuan Struggles To Gain Traction In Trial Phase

According to CoinDesk, China's digital yuan, also known as e-CNY, is struggling to gain popularity during a trial phase where state employees are paid their salaries in the central bank digital currency (CBDC). The South China Morning Post (SCMP) reports that most early recipients immediately transfer their digital yuan balances to their bank accounts to use as cash. "I prefer not to keep the money in the e-CNY app, because there’s no interest if I leave it there," said Sammy Lin, a participant in the pilot. "There are also not so many places, online or offline, where I can use the e-yuan." The e-CNY has been undergoing trials across China since 2019, but there is no set timeline for a national launch. Almost all developed countries are exploring the development of a CBDC as a digital complement to cash, with China leading the way. However, the CBDC is fraught with privacy concerns as it incorporates elements of blockchain technology, making all transactions theoretically traceable. This has led consumers to prefer using online payment tools such as Alipay and WeChat Pay. The option to pay in physical cash also remains, though it is far less prevalent.