Despite being part of the central bank's digital currency pilot program, some participants are hesitant to use the digital yuan due to various concerns. According to a recent report, some Chinese state employees who receive their salaries in digital yuan rarely use it, opting instead to convert it to physical cash.

The limited offline and online usability of the digital yuan restricts its practical use, making it impractical for daily transactions. Additionally, concerns about privacy and surveillance are significant barriers to adoption. While the government has made efforts to increase adoption through subsidies and consumption vouchers, citizens' concerns about security and ease of use need to be addressed.

The digital yuan, also known as e-CNY, lacks features like interest accrual, and its use is limited, making it less appealing to users. Moreover, the e-CNY wallet has restrictions on depositing money or purchasing financial products. To increase adoption, the government needs to balance privacy and security concerns, ensuring "controllable anonymity" and protecting users' information.

Since its inception in 2020, various jurisdictions in China have been working to increase digital yuan adoption. However, the challenges highlighted in this report need to be addressed to ensure widespread acceptance and use of the digital currency.