China’s digital yuan adoption is facing “bottlenecks” according to Charles Chang, the director of the Fintech Research Centre at Fudan University in Shanghai. Chang highlighted that user reluctance and competition from popular platforms like Alipay and WeChat Pay are hindering the widespread adoption of the digital yuan.

Despite the potential of the digital yuan, Chang pointed out that the entrenched user bases of Alipay and WeChat Pay make it challenging to convince consumers to switch to a new payment option. Currently, China’s mobile payment ecosystem is dominated by these platforms, with around 185 non-bank payment institutions in the country.

Chang acknowledged that Beijing is encountering obstacles in adopting the digital yuan, but emphasized that the push for the state-run digital currency will continue. This determination comes despite corruption accusations against Yao Qian, the former head of the People’s Bank of China’s digital currency institute.

The digital yuan was launched in trials across select cities in 2019 as part of China’s ambitious goal to become a global leader in central bank digital currencies. The People’s Bank of China (PBOC) has extended the pilot program to 26 regions in 17 provinces, with no official timeline for a nationwide launch yet.

As of June, the cumulative transaction value of the digital yuan had reached 7 trillion yuan (approximately $968 billion), showing a significant increase from the previous year. However, experts like Chen Zhiwu, chair professor of finance at the University of Hong Kong, caution that the digital yuan may not be able to overcome the broader limitations of the yuan’s appeal.

Despite the challenges and competition, China remains committed to pushing forward with the adoption of the digital yuan. The country’s efforts to establish itself as a leader in central bank digital currencies continue, with ongoing trials and expansions of the digital yuan program.