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China’s Digital Yuan Will Be ‘Backup’ to Alipay, WeChat, Says PBOC
In order to support the retail payment system, the central bank has to step up its own digital yuan.
The director of the Digital Currency Research Institute at the People’s Bank of China (PBoC) said the digital yuan is necessary to provide a backup to Alipay and WeChat Pay.
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- Speaking at the Bank for International Settlements (BIS) seminar on Thursday, Mu Changchun said Alipay and WeChat Pay together make up 98% of the mobile payments market, and one key reason the PBoC is developing its own digital yuan is to provide a “backup” payment option, according to a Bloomberg report.
- Mu suggested if "something bad" were to happen to Alipay or WeChat Pay, financially or technically, it could have a "negative impact" on the stability of China's financial system.
- In order to provide backup for the retail payment system, the central bank has to step up its own digital yuan.
- China is leading other major nations in developing central bank digital currencies (CBDCs), but the digital yuan project has raised concerns about the amount of insight it would give authorities into users’ financial data and behavior.
- At the BIS seminar, the PBoC proposed a set of global rules for monitoring CBDCs and shared its proposals with other central banks and monetary authorities.
- In February, a report emerged stating that MYbank and WeBank – institutions backed by Chinese giants Ant Group and Tencent, respectively – were set to join the ongoing trial of the digital yuan.
Tanzeel Akhtar
Tanzeel Akhtar has contributed to The Wall Street Journal, BBC, Bloomberg, CNBC, Forbes Africa, Financial Times, The Street, Citywire, Investing.com, Euromoney, Yahoo! Finance, Benzinga, Kitco News, African Business Magazine, Hedge Week, Campden Family Office, Modern Investor, Spear's Wealth Management Magazine, Global Investor, ETF.com, ETF Stream, CIO UK, Funds Global Asia, Portfolio Institutional, Interactive Investor, Bitcoin Magazine, CryptoNews.com, Bitcoin.com, The Local, The Next Web, Mining Journal, Money Marketing, Marketing Week and more. Tanzeel trained as a foreign correspondent at the University of Helsinki, Finland and newspaper journalist at the University of Central Lancashire, UK. She holds a BA (Honours) in English Literature from the Manchester Metropolitan University, UK and completed a semester abroad as an ERASMUS student at the National and Kapodistrian University of Athens, Greece. She is NCTJ Qualified - Media Law, Public Administration and passed the Shorthand 100WPM with distinction. She does not currently hold value in any digital currencies or projects.
