China has started trial of digital yuan, also known as e-CNY. Some state employees are now getting their salary in e-CNY. But apparently something went wrong.

According to a report by the South China Morning Post (SCMP) reviewed by Coindesk, most early users immediately transfer the digital yuan balances to their bank accounts to spend as cash.

“I prefer not to keep the money in the e-CNY app, because there’s no interest if I leave it there,” Sammy Lin, one participant in the pilot, said. “There are also not so many places, online or offline, where I can use the e-yuan.”

China's digital yuan, also known as e-CNY, is an example of a central bank digital currency (CBDC).

Almost all developed countries are at least exploring the development of a CBDC as a digital complement to cash.

China was one of the first to explore the uncharted waters of the CBDC. The e-CNY has been undergoing trials across China since 2019, though there is no timeline for a national launch.

The CBDC is also fraught with privacy concerns as it incorporates elements of blockchain technology so transactions are all theoretically traceable.

That means consumers prefer to use online payment tools such as Alipay and WeChat Pay. Paying in physical cash also remains an option, though this is far less prevalent.

But as the trial have already shown people are prone to stick to the cash, Which kind of undermine the whole idea of CBDC.