(Yicai Global) Oct. 26 -- Fake digital Chinese yuan wallets have already been spotted in China, according to the director of the central bank’s research arm on digital currency.

Online rumors that digital yuan was mandatory for some home sales in Shenzhen and may not be exchanged for gold or foreign currency is also fake news, Mu Changchun, head of the People's Bank of China's Digital Currency Research Institute, said on the last day of the three-day annual Bund Summit in Shanghai yesterday.

The rumors began after the southern technology and manufacturing hub gave away 50,000 so-called red packets containing a total of CNY10 million (USD1.5 million) in virtual yuan on Oct. 9. Consumers could spend the crypto-money between Oct. 12 and 18 at 3,389 stores in the city's Luohu district that had upgraded to handle the digital yuan.

Virtual yuan has the same value as physical notes and coins of the same denomination and can buy everything a paper note can buy, and the foreign currencies a paper note can exchange into are also exchangeable for digital yuan. The Shenzhen trial aimed to spur consumption, but second-hand homes were not part of that move.

Promotion of crypto-yuan should not be achieved by coercive administrative means, but carried out in a market-oriented manner, Mu said. Blockchain yuan and paper notes will coexist for a long time.

The virtual yuan and leading third-party mobile payment apps WeChat Pay and Alipay are not rivals, Mu also said. WeChat Pay and Alipay form the financial infrastructure and wallets, he said, while digital yuan is the payment tool and the content of the wallets. WeChat Pay and Alipay wallets only contain bank deposit money at the moment, but will also include digital yuan in the future.

The banks run by Tencent Holdings and Ant Group, the operators of the two mobile payment platforms, are operating agencies and are also not competitors to the digital yuan, Mu said.

Editor: Ben Armour