China's digital yuan meets user resistance, with privacy fears and limited acceptance driving a preference for cash.
The South China Morning Post (SCMP) reported that the digital yuan, also known as e-CNY, is facing resistance in gaining widespread acceptance among its early users. The report highlights the experiences of state employees who are part of a pilot program receiving their salaries in the central bank digital currency (CBDC). However, many are choosing to convert their digital yuan into cash immediately.
Sammy Lin, an account manager at a state-owned bank in Suzhou, is among the first group of workers to be fully paid in the digital yuan. She chooses to transfer her e-CNY balance to her bank account, explaining, “I prefer not to keep the money in the e-CNY app, because there’s no interest if I leave it there. There are also not so many places, online or offline, where I can use the e-yuan.”
The SCMP also reported that privacy concerns are a significant factor in the hesitant adoption of the digital yuan. “Though I myself don’t worry much about privacy – online payment is so common that I rarely use cash now – I understand there are people who are concerned about this,” Lin added.
Despite the promise of "controllable anonymity" for smaller transactions, as claimed by former People’s Bank of China governor Yi Gang, the established mobile payment apps like Alipay and WeChat Pay present convenient alternatives that are not under direct government control.
As the digital yuan is not yet accepted everywhere, Albert Wang, a municipal government employee in Suzhou, also chooses to withdraw his digital yuan salary. “The disadvantages are obvious as it is not accepted in all shops, and serves merely as a payment tool,” he remarked, indicating that it cannot compete with the functionality of established online payment platforms.
China's e-CNY has been in trial across several cities since 2019 with no timeline for a national launch. Despite this, the Industrial and Commercial Bank of China reported over 15 million new individual e-CNY wallets and more than 1.3 million new business entity wallets last year.
