Get To Know E-CNY, China's Newly Launched Digital Yuan Wallet

China launched a pilot version of the wallet app, e-CNY. (photo: Unsplash)

JAKARTA - China has just launched a pilot version of its dubbed wallet app, e-CNY. This application allows users to store and transact with digital yuan.

So what are digital yuan and e-CNY? Keep in mind, the digital yuan is not a cryptocurrency, it was developed by the People's Bank of China (PBOC) to replace paper money and coins.

As such, it is not a decentralized form of payment, nor will it operate on the blockchain. e-CNY is basically physical cash converted into digital form and has been working since 2014.

According to CNBC International, the distribution of the digital currency will be carried out using a two-stage process that transfers e-CNY from the PBOC to commercial banks. Then the bank will distribute the currency directly to consumers.

Since e-CNY is not a decentralized currency like bitcoin and other cryptocurrencies, it does not have the same privacy.

From reports circulating, e-CNY can use anonymity as the owner, which means users can choose to hide their identity from anyone, but will still let the authorities monitor transactions to prevent illegal activities such as money laundering.

Cited from The Verge, Wednesday, December 5, China itself already has digital payment applications such as WeChat and AliPay. Not a few people there who take advantage of this application. It seems impossible for the Chinese to want to switch to the digital yuan, but China has been working hard to promote it.

In the past two years, cities across China have even distributed a total of 10 million digital yuan to people in Shenzhen in October 2020, 20 million digital yuan in Suzhou in December 2020, and 40.2 million digital yuan in Chengdu in February 2021.

Bloomberg reported that while covering a trade show in Beijing, they found foreigners could register for an e-CNY account using their passport and phone number, as well as convert foreign currency to e-CNY.

This is most likely a Chinese strategy to take advantage of the approaching 2022 Beijing Winter Olympics to make it easier for visitors to make payments. This app is already available on a limited basis on Android and iOS China.