China's digital yuan isn't being used much, according to a former official of the People's Bank of China (PBOC), the nation's central bank.

According to a January PBOC report, only 261 million users have created an e-CNY wallet, despite the government's quick expansion of the trials and additional wallet features in an effort to draw consumers. According to a 2021 China UnionPay estimate, there are around 903.6 million mobile payment users in China.

According to a Caixin report, Xie Ping, a former PBOC research director and current finance professor at Tsinghua University, expressed negative opinions in public regarding China's central bank digital currency (CBDC) during a recent academic conference.

Two years after its inception, the total value of digital yuan transactions had barely reached $14 billion (100 billion yuan), according to Xie.

"The results are not ideal," he said, adding that "usage has been low, highly inactive."

To increase acceptance, the former central banker believes the use case of e-CNY should be expanded beyond its current usage as a cash substitute and expanded to include additional purposes such as the capacity to pay for financial products or connected to new payment platforms.

He contrasted the digital yuan with other third-party payment systems in China, such as WeChat Pay, Alipay, and QQ Wallet, which allow for investments, lending, or borrowing. He stated that they "have formed a payment market structure that has met daily consumption needs."

Some third-party banking apps are e-CNY compatible, but they are rarely used since "people are used to" using the original service and transition "is difficult," according to Xie.

Such criticism of government programs by former officials is unusual and suggests that China may be having severe difficulties gaining support for its CBDC initiative.

In an effort to draw users in time for Chinese New Year, new capabilities were added to the e-CNY wallet app. These features added functionality to transmit digital replicas of traditional red packets or red envelopes (hongbao) holding money-a popular habit during festivities.

The most recent expansion of e-CNY trails by the government was to four additional locations in December. The provinces of Guangdong, its most populous, and three others were previously included in the September expansion.