Alipay, a digital payment platform owned by Ant Group, a subsidiary of Chinese internet giant Alibaba, will be one of the first large private organizations in China to take part in the digital yuan test. So far – among a limited number of registered users.
According to the China Securities Journal publication, testing of digital yuan capabilities in Alipay is the result of MYbank’s participation in advanced protocols for testing electronic payments in China’s state cryptocurrency. The initiative confirms Ant Group’s participation in the People’s Bank of China (PBOC) digital yuan project. The conglomerate owns a majority stake in MYbank, one of the largest internet banks in the country. The AliPay owner of the Ant Group, a tech company, owns 30% of MyBank. As of the end of 2020, the credit institution served 35 million customers. It is 68% more than a year ago.
Another participant in the tests is Tencent’s WeBank online bank.
In general, six of the largest commercial banks involved in testing, which have developed the corresponding wallets.
PBC is actively testing digital yuan
The digital currency based on blockchain technology and distributed directly by the PRC’s central bank to other Chinese financial institutions and e-commerce platforms. Unlike previous virtual payment methods, the digital yuan does not require internet access and there is no service charge.
The PRC is actively testing the digital yuan through free giveaways of government cryptocurrencies in major cities during trade events where merchants are encouraged to accept the digital yuan as a means of payment. In addition, it was recently revealed that Internet giant JD.com used an electronic payment system based on China’s digital currency to pay salaries to some employees since January this year. The six largest banks in China are also actively promoting the state cryptocurrency as a payment instrument. Analysts believe the digital yuan threatens Alipay and WeChat Pay.
Ant didn’t confirm the exact nature of its participation in the digital currency project. But said that together with MYbank, the group will participate in testing and research of the digital yuan, also called e-CNY.
China is the only country in the world to go this far in promoting official digital currencies. The digital yuan already distributed in a two-tier scheme. First, it issued by the regulator, then banks and financial institutions distribute the means of payment among users.
A test mobile application with an e-wallet for the digital yuan was launched last year. Virtual currency began to accept in stores and cafe. Also such chains as McDonald’s, Subway and Starbucks joined the test drive.
The e-CNY can make the payment system more convenient and cheaper.
Curious are the results of the October test in Shenzhen – a large industrial, technological and financial center. 50 thousand residents of the city won 10 million digital yuan (more than $ 1.5 million) in the lottery. Each of them received 200 yuan in virtual red envelopes – in China, it is customary to give cash that way. For a week, users have spent almost all of the allocated money.
The spread of the e-CNY through Alipay and WeChat will surely make it one of the most popular virtual assets in the world.