Yahya 
As China takes its first steps toward a digital currency, the digital yuan is being rejected by some of the participants in the pilot program. The reports show hesitation to accept the government-endorsed digital currency due to diverse fears and restrictions.
As per the recent South China Morning Post report, in some Chinese cities, where state workers receive part of their payments in the CBDC, efforts to integrate the digital yuan into every-day transactions seem to fail as the participants, instead of using the CBDC, are converting it immediately to physical cash. Another account manager of a state bank in Suzhou, Sammy Lin, also raised doubts about using the e-CNY app in order to store the funds, pointing out the absence of interest and small opportunities for the balance expenditure.
Utility Issues
Andrew Wang, a public employee, had the same opinion, mentioning that he did not worry much about digital currency himself but that his wife, who received her whole salary in digital RMB, would immediately convert the amount into cash since it did not serve any purpose. Wang highlighted that the e-CNY wallet does not allow deposits or investing in financial products, thus underpinning the issues that come in the process of transitioning into an entirely digital economy.
Privacy vs. Surveillance
Although China has made huge progress in digital payments, with over $250 billion in digital yuan transactions by mid-2023, there are issues concerning privacy and surveillance. A researcher at Beijing’s Cheung Kong Graduate School of Business, Ye Dongyan, pointed out the necessity of a careful balance between privacy and security in the operationalization of digital yuan. The privacy problems are still a big problem. Even the former governor of the People’s Bank of China, Yi Gang, says it is the biggest challenge in the digital finance era.
Government Assurance
To privacy concerns, Yi Gang responded during a forum in Beijing that the digital yuan ensures “controllable anonymity,” thus preserving privacy and providing for traceability in larger transactions. Though the government gives assurances, the public has questions about the practical aspects of this approach and its threat to the privacy rights of individuals.
Promotional Efforts
Measuring from the year 2020, when it was created, several jurisdictions in China have rolled out initiatives for the promotion of the CBDC, where subsidies and consumption coupons of over $26.5M have been offered. Yet, these campaigns have not been very successful in dealing with the issue of privacy versus function, thus signaling a long way to the wide acceptance of China’s digital currency experiment.