China to Use CBDC for All Retail Transactions

China is making significant strides towards the full-scale rollout of its digital yuan, with an emphasis on expanding its use across all retail payment scenarios. Changchun Mu, head of digital currency research at the People’s Bank of China (PBoC), confirmed that the central bank is seeking to make the digital yuan a viable competitor against current payment options like Alipay and WeChat Pay.

The digital yuan has already been utilized in sectors such as transportation and e-commerce but has been limited in its scope. Mu clarified that the digital yuan wouldn’t be restricted by the size of payments, debunking the belief that it could only be used for small payments.

To improve the retail usage of the digital yuan, the PBoC plans to unify QR code standards for barcodes. This move is essential since private payment providers currently control a large chunk of QR payments in Mainland China. Also, the PBoC plans to roll out new regulatory standards for digital yuan wallet providers, commercial bank mobile apps, and third-party payment institutions interacting with the CBDCs. Service providers will be forced to obtain new financial licensing and be subjected to significant regulatory supervision.

In addition to retail transactions, Mu hinted at the possibility of incorporating the digital yuan into wholesale transactions between commercial banks. However, he emphasized that a total replacement of existing systems isn’t necessary.

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Jack McPherrin ([email protected]) is a managing editor of, research editor for The Heartland Institute, and a research fellow for Heartland's Socialism Research Center. He holds an MA in International Affairs from Loyola University-Chicago, and a dual BA in Economics and History from Boston College.