Image by Ledger Insights
We recently reported that China’s central bank digital currency (CBDC), the eCNY, processed $56 billion in transactions in a single month. It reached a cumulative volume of RMB 7 trillion, which is nearing the $1 trillion mark ($932 billion to be precise). However, a fair proportion is business usage. Stories continue to circulate about a lack of consumer enthusiasm for the digital RMB. Now a senior Chinese academic at Peking University, Dong Zhiyong, has proposed how to incentivize usage. These are not the views of the central bank’s Digital Currency Research Institute. However, one of China’s big state-run news agencies published them.
Mr Dong highlighted that banks aren’t really incentivized, that consumers are comfortable using WeChat Pay and Alipay, and that there’s room for improvement with the current eCNY consumer incentives. In the past there have been reports that many people spend the ‘red envelope’ free money giveaways, and don’t bother using the CBDC much beyond that.
The first suggestion is the use of the digital RMB by the state and the vast number of state-owned enterprises. That’s already happening to a degree. Some people receive salaries in eCNY. However, they often immediately transfer the money to their bank accounts because the eCNY doesn’t earn interest. Additionally, not enough outlets accept the eCNY for payment.
Retrieved from: https://www.ledgerinsights.com/china-mulls-how-to-incentivize-cbdc-adoption-by-payment-providers-consumers/
