WeChat Adds Digital Yuan Payment Functionality

WeChat, China’s leading social networking and payment app, has now integrated the country’s central bank digital currency, the digital yuan, into its payment services, according to local reports. This move comes after Alipay, another leading payment platform, added the same functionality to its platform in December 2022. WeChat’s addition of the digital yuan fast payment function allows users to make payments on certain mini-programs and platforms that support the digital yuan.

The pilot version of the digital yuan application’s “Wallet Quick Payment Management” page currently lists 94 platforms, now including WeChat, that can be accessed. The integration enables WeChat Pay to allow digital yuan payments on certain apps, such as McDonald’s food orders and bill payments. However, users need to authorize the digital yuan wallet operator to sync their WeChat-bound mobile phone number to activate the fast payment function successfully.

According to Linghao Bao, an analyst at Trivium China, a strategic advisory firm, “Chinese consumers are so locked in WeChat Pay and Alipay, it’s not realistic to convince them to switch to a new mobile payment app. So it makes sense for the central bank to team up with WeChat Pay and Alipay as opposed to doing it on its own.”

The digital yuan, also known as the e-CNY, is being piloted in at least 26 Chinese provinces and cities. The token saw an increase in transaction volumes on Chinese e-commerce platforms during the 2023 Lunar New Year shopping season, helped by e-CNY handouts from authorities.

Alipay had announced its access to the digital yuan acceptance network in December 2022, enabling users to spend digital yuan consumption on platforms served by Alipay, including Taobao, Shanghai Bus, Ele.me, Youbao, Tmall Supermarket, and Hema.

As the digital yuan’s integration with leading payment platforms like WeChat and Alipay grows, it is expected to become more widely adopted in China, potentially challenging existing payment methods like cash and cards. The central bank’s collaboration with these platforms is likely to help broaden the appeal of the digital yuan among Chinese consumers who are already comfortable with these apps.

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WeChat to Ban Crypto and NFT-Linked Accounts, following Updated Terms of Use

China’s WeChat, the Tencent-backed social messaging platform, has announced its plans in an indirect manner to crack down on accounts on the platform that are linked to digital currencies and Non-Fungible Tokens (NFTs).

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As first pointed out by an independent crypto journalist, Colin Wu, the social media giant has updated the terms of its usage, adding a new section that doubles down on its lack of support for any entities associated with the digital assets industry.

The updated guideline stated that any account that “involves the issuance, transaction, and financing related to virtual currency, such as providing transaction entry, guidance, and issuance channel guidance” amongst others will be suspended. 

The targeted accounts involve those specifically facilitating “transaction and exchange business between virtual currency and real currency, virtual currency, and virtual currency; Provide information intermediary and pricing services for virtual currency transactions; Token issuance financing and virtual currency derivatives trading, and; provide services or content related to the secondary transaction of digital collections.”

While the immediate suspension of the accounts is one of the sanctions the platform will mete out, it said it can also ban any user found to be guilty depending on the severity of the violations.

The crackdown on Bitcoin and the broader cryptocurrency ecosystem in China is not a new reality. In fact, the most populous nation in the world has been able to tame the activities of miners operating on its shores via a comprehensive ban instituted last year. 

There have also been increasing calls against NFTs, which regulators say can be used to launder money. The move from WeChat may suggest a partial alignment with regulators, as Beijing has been particularly tough on tech giants in the country. 

While the sentiments around digital currencies have largely died down in China, with most prominent exchanges closing up shop in the country, the crackdown on NFTs by WeChat will further tame the prospects of China regaining its spot as the world power in anything related to digital assets.

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Chinese Tech Giants Pull the Plug on NFTs to Wade Off Regulatory Crackdown

Known for the government’s broad-based crackdown on tech companies, China’s native tech companies, including WeChat from Tencent and WhaleTalk from Ant Group, have started changing their receptiveness towards Non-Fungible Token (NFT) platforms or startups making use of their services.

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As reported by local news channels, WeChat has started suspending the accounts of NFT outfits because they violated its policies on illegal trading. Two of the most prominent outfits that have suffered this fate include the much-hyped NFT platform Xihu No.1 and Dongyiyuandian, both of whom said their accounts and apps have been pulled down.

On the part of WhaleTalk, the laid down user agreements are currently being revised. As garnered, the move from both platforms is notably in a bid to wade off any scrutiny from authorities. The trading of cryptocurrencies has been proven to be almost as popular as those of cryptocurrencies that were banned last year.

China’s stance toward the digital currencies ecosystem is clear. These tech firms are doing all they can to align with the People’s Bank of China (PBoC) policies that mandated all financial service providers operating within its shores, not to help facilitate transactions involving digital assets.

While no Chinese authorities have come out to voice out reservations concerning the growing NFT world, there is a high probability that the authorities will turn to this alternative many have used to gain exposure to what is considered an unsafe ecosystem where money laundering activities can easily be perpetrated. 

At this time, every stakeholder approaches the Chinese NFT marketplace with caution. Some of these big tech firms, such as Tencent and Alibaba have been filing for patents and trademarks relating to the NFT space and the country registered more than 10,000 blockchain startups back in 2020. Should the appropriate authorities regulate the NFT and the digital collectible world, these tech startups will be among the first and biggest beneficiaries.

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Chinese Tech Giants Pulls the Plug on NFTs to Wade Off Regulatory Crackdown

Known for the government’s broad-based crackdown on tech companies, China’s native tech companies, including WeChat from Tencent and WhaleTalk from Ant Group, have started changing their receptiveness towards Non-Fungible Token (NFT) platforms or startups making use of their services.

TECH2.jpg

As reported by local news channels, WeChat has started suspending the accounts of NFT outfits because they violated its policies on illegal trading. Two of the most prominent outfits that have suffered this fate include the much-hyped NFT platform Xihu No.1 and Dongyiyuandian, both of whom said their accounts and apps have been pulled down.

On the part of WhaleTalk, the laid down user agreements are currently being revised. As garnered, the move from both platforms is notably in a bid to wade off any scrutiny from authorities. The trading of cryptocurrencies has been proven to be almost as popular as those of cryptocurrencies that were banned last year.

China’s stance toward the digital currencies ecosystem is clear. These tech firms are doing all they can to align with the People’s Bank of China (PBoC) policies that mandated all financial service providers operating within its shores, not to help facilitate transactions involving digital assets.

While no Chinese authorities have come out to voice out reservations concerning the growing NFT world, there is a high probability that the authorities will turn to this alternative many have used to gain exposure to what is considered an unsafe ecosystem where money laundering activities can easily be perpetrated. 

At this time, every stakeholder approaches the Chinese NFT marketplace with caution. Some of these big tech firms, such as Tencent and Alibaba have been filing for patents and trademarks relating to the NFT space and the country registered more than 10,000 blockchain startups back in 2020. Should the appropriate authorities regulate the NFT and the digital collectible world, these tech startups will be among the first and biggest beneficiaries.

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WeChat Offers Digital Yuan Payments Ahead of Beijing Winter Games

WeChat has become compatible with payments using the digital yuan ahead of the Beijing Winter Olympics, owner Tencent Holdings said.

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The move by Tencent comes at a time when the Chinese government plans to test its digital yuan around Olympic venues next month when the Games begin.

From the perspective of Tencent, whose business strategy revolves around WeChat, the move is a strategy to prevent a loss of users from the app.

To use the payment feature on WeChat, a user must download the People’s Bank of China’s e-CNY app and create a digital yuan wallet with WeBank – the virtual bank backed by Tencent, followed by linking the WeBank wallet to the WeChat account to initiate payments.

Whether the central bank’s digital yuan will compete, or coexist, with other smartphone payment platforms is yet to be seen.

The world’s largest chat app has about 1.2 billion users, mainly in China. Currently, China’s digital yuan is limited to a few local cities, and only a handful of businesses accept the currency.

According to a January 5, 2021, report by Blockchain.News, the People’s Bank of China (PBoC) extended its pilot tests for the digital yuan to launch a new mobile wallet. The new wallet is available to a select few as it is still in the development phase.

The report stated that the new mobile wallet is notably available on the Google Play Store and the Chinese-supported App Store for iOS users.

Along with WeChat, the government also plans to turn Macau into a testbed for the digital yuan as casino owners prepare to bid for new licenses in the city for the first time in two decades.

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Chinese banks tell staff to recruit up to 300 new digital yuan users each

Chinese banks have begun a hard sell of digital yuan wallets, asking staff to recruit hundreds of new users each year.

According to a translation of a June 6 article from Shenlian Caijing, employees of top banks such as the Industrial and Commercial Bank of China and the Bank of Communications, along with four other state-owned banks, have been instructed to promote digital yuan wallets to an average of 200 to 300 people a year.

To entice new users, employees are able to offer an odd variety of small gifts, such as “laundry detergent, data cables, card holders, Chinese knots, umbrellas, and tissues.”

The banks have included the task of promoting the central bank digital currency (CBDC) on employee evaluations, with the number of CBDC wallet recruits determining each branch’s end of year bonuses.

Essentially the banks have deployed an incentive scheme focused on mass recruitment of wallet users, and will reward branches and their employees with favorable performance reviews and monetary bonuses.

From the Chinese government’s perspective, the ramp-up in digital yuan wallet adoption is part of a move to get a stronger hold over the financial tech market, as it will be in competition with payment service providers such as Alipay and WeChat, who reportedly account for 98% of the mobile payment market in China.

Cointelegraph reported on April 26 that in the lead-up to an online shipping festival on May 5, six of China’s largest banks promoted the CBDC as a better alternative to Alipay and WeChat.

Related: From mining to software: China’s regulatory crackdown on crypto continues

As part of China’s ongoing testing of the CBDC, the local government of Chengdu, located in the Sichuan province, announced on June 2 that it is issuing 12 million digital yuan ($1.85 million) via a lottery to 100,000 residents.

The theme of the lottery is dubbed “Green Travel – low carbon summer” and interestingly, the 12 million digital yuan is pre-programmed to work specifically for public transportation payments, such as bus and subway tickets, along with shared bike rental payments.