China’s CBDC Efforts Struggle to Deliver, Report Questions Xi Jinping’s Influence

A recent report by The Epoch Times has cast doubt on the success of China’s digital Yuan project, claiming that it has "failed" and pointing to challenges faced by the initiative under President Xi Jinping’s leadership.
A recent report by The Epoch Times has cast doubt on the success of China’s digital Yuan project, claiming that it has “failed” and pointing to challenges faced by the initiative under President Xi Jinping’s leadership.
The report highlights political developments and a perceived shift in Beijing’s stance on its central bank digital currency (CBDC). Yao Qian, a driving force behind the digital Yuan push, was recently fired, which presented a significant challenge. Yao was dismissed from the Chinese Communist Party (CCP). He was the founding director of the Digital Currency Research Institute and the former head of the Science and Technology Supervision Department of the China Securities Regulatory Commission. He is accused of making secret agreements with IT companies and taking bribes.
The Epoch Times indicated that “people behind the scenes” might be impeding the digital Yuan project’s advancement and argued that Yao’s removal represents a deeper level of government pushback against its continuation. Yao began working on the digital Yuan project in 2014, and his exit is viewed as a significant blow to the endeavor.
Slow Adoption and Declining Enthusiasm
While Xi Jinping initially promoted the digital yuan as a key component of China’s economic and technology-oriented goals, it has struggled to garner universal acceptance. The Paper, a state-controlled publication, questioned the project’s success in 2022, stating that despite four years of promotion, “so few people” had adopted the currency. Additionally, a poll on social media platform X revealed that 90% of respondents had neither seen nor used the digital Yuan. At a personal use level, the Chinese economy is almost entirely cashless these days, with the WeChat app ubiquitous on Chinese cellphones and the dominant payment method nationwide for day-to-day transactions.

With the WeChat app omni-present in China, few Chinese consumers are even aware of a digital currency,
This waning interest coincides with a noticeable slowdown in updates and developments related to the CBDC in 2023. The Epoch Times stated that Beijing’s perception of the digital Yuan has altered, from a revolutionary instrument for everyday living to merely a supplement to the existing payment system.
Despite setbacks, efforts to promote the digital Yuan continue at the local level. The Shanghai Municipal Government recently announced new adoption measures, and the city of Fuzhou unveiled plans to integrate the digital Yuan into project financing. These initiatives suggest that some regional governments remain committed to advancing the CBDC.
On the international stage, the expansion of BRICS presents a potential lifeline for the digital Yuan. BRICS leaders decided to investigate joint CBDC systems for cross-border payments at a recent conference in Kazan, Russia. According to a China Daily contributor, BRICS presents chances to globalize the digital Yuan in conjunction with programs like the Regional Comprehensive Economic Partnership and the Belt and Road. Hong Kong’s financial influence is also seen as a critical asset in this effort.
The dismissal of Yao Qian and the digital Yuan’s slower adoption rate raises questions about the future of China’s CBDC initiative. However, Beijing’s strategic partnerships within BRICS and ongoing regional efforts may yet provide avenues for revitalizing the project. As China seeks to balance domestic challenges with international ambitions, the digital Yuan’s trajectory remains uncertain but far from conclusively over.
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