KANALCOIN NEWS – The Chinese government is now back to making policies. Recently, several state-owned banks in China will actively promote the digital Yuan. The goal is to make the digital Yuan a superior means of payment than Alipay and WeChat Pay.
In fact, Alipay and WeChat Pay are already the leading payment instruments in the country. Interestingly, on April 1, China completed its first digital Yuan trial with Hong Kong.
According to a Reuters report reported by Kanalcoin.com via Cointelegraph, the six largest banks in China are promoting the digital currency that was born from the Central Bank Digital Currency (CBDC). This promotion will be carried out ahead of the online shopping festival on May 5, 2021.
The central bank also urged retail outlets and consumers to download digital wallets, and make payments via CBDC or e-CNY. In addition, China’s central bank also asked the public to stop paying using Alipay and WeChat Pay in the online shopping festival.
One of the bank officials appointed at the trial launch of the CBDC in Shanghai and under the guidance of the People’s Bank of China (PboC) specifically described the digital currency as being superior to Alipay and WeChat Pay.
“People will realize that digital Yuan payments are very convenient, so I no longer need to rely on Alipay or WeChat Pay,” said the bank official.
In an online panel discussion at the end of March, the Head of the PBoC Digital Currency Research Institute, Mu Changchum, stated that Alipay and WeChat Pay have controlled 98% of the mobile payments market in China to date.
This poses a risk to the domestic financial system, should both experience any problems.
Changcum predicts the central bank does not intend to compete with Alipay or WeChat Pay. Only, they act as a backup to ensure financial stability in case something happens.
However, the state is also stepping up its efforts to reduce the dominance of the tech giants, thereby suppressing anti-competitive behavior in the internet sector.
As a form of anticipation, in early April, the local government had beaten Alibaba with a record fine of $2.8 billion or around Rp. 40.40 trillion. The fine was imposed because of the alleged monopolistic practice.
Still according to Cointelegraph, the launch of the digital Yuan will allow the central government to gain control of financial data stored by payment service providers in China, namely Alipay and WeChat Pay.
“Big data is wealth. Whoever has the data, will certainly grow rapidly. Alipay and WeChat Pay both have a sea of data,” said another banking official tasked with promoting the CBDC.
Seeing this phenomenon, academic Martin Chorzempa also commented on the consensus conference held last May.
He said it was difficult for Chinese financial regulators to force the two companies, Alipay and WeChat Pay, to hand over the data they had collected.
“China’s CBDC may have the potential to gain more access to payment data, as well as regain some of the power from the company,” said Chorzempa..
The six banks in the CBDC scheme include the largest lending banks in China, namely The Industrial and Commercial Bank of China, Agricultural Bank of China, Bank of China, and China Construction Bank.
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