The digital yuan would try to reduce Alibaba and Tencent’s dominance in China

He People’s Bank of China (PBoC) would plan to use his electronic digital currency system (DCEP) – another name for your central bank’s digital currency – face the dominance of technology giants like Alibaba and Tencent in the field of digital payments.

The report appears just a few days later The central bank will urge a major anti-trust authority to launch an investigation into Alipay and WeChat Pay for using its dominant position to suppress competition.

according to Financial Times, including regulators and executives from ant, the financial group of Alibaba, They agreed that the PBoC will focus on controlling the Alipay and WeChat Pay market.

The digital yuan would try to reduce Alibaba and Tencent’s dominance in China
The digital yuan would try to reduce Alibaba and Tencent’s dominance in China

As of now, Alibaba’s financial subsidiary, Alipay, and WeChat Pay, from Tencent, Control most digital payments across Chinawhile the banks lag far behind the competition. In the first quarter of 2020 Alipay processed almost 56% of all mobile payments in China.

The central bank is preparing the place

According to the information from Financial Times from various officials who are familiar with central bank strategies The PBoC will use DCEP to offer banks equal opportunities in the area of ​​digital paymentsas before with leading technology companies.

The head of Asian economic research at a major international bank reflected on the unprecedented opportunities that large technology companies were offered to use digital payments Former PBoC governor Zhou Xiaochuan had allowed Alipay and WeChat Pay to turn into “monsters” despite complaints from Chinese banks and the China Banking Regulatory Commission.

In a separate statement, a senior official of the Hong Kong Monetary Authority Who knows about the thing said:

“She [el PBoC] They want a level playing field for banks. Consumer payments are heavily dominated by Alibaba and Tencent, while banks are less active in electronic payments. “

Is China fighting Alipay and WeChat Pay?

At the height of their promotion in March Various reports have claimed that Alibaba and Tencent are both an active part of the “Digital Yuan” project. However, a report from South China tomorrow post suggested that China use its digital currency as a an alternative payment option to Alipay and WeChat Pay. Cointelegraph also reported that both companies were not on the list of participants in the CBDC project.

Vice versa, Some believe that the DCEP does not work against Alipay and WeChat Pay, but integrates them into the system to make digital payments faster and smoother. It should also be noted that Alipay has several patents related to the Chinese digital currency, indicating that the company is not yet completely out of the game.

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