TIMES.KY

Cayman Islands, Caribbeanand International News
Thursday, Mar 28, 2024

Digital yuan will not compete with WeChat Pay or Alipay

Digital yuan will not compete with WeChat Pay or Alipay

China’s digital yuan will not compete with private apps like WeChat Pay and Alipay, but it may have to contend with counterfeit digital wallets.

China’s Digital Currency Electronic Payment (DCEP) will not compete with WeChat Pay and Alipay, the head of the programme clarified for the first time on Sunday. The two digital wallets had a combined 94 per cent share of the country’s mobile payments industry in the second quarter, according to iResearch.

“They don’t belong to the same dimension. WeChat and Alipay are wallets, while the digital yuan is the money in the wallet,” said Mu Changchun, the head of the research institute for digital currency at the People’s Bank of China. He spoke in Shanghai at the 2nd Bund Summit, co-organised by the China Finance 40 Forum.

However, the digital yuan is distributed through an app that some consumers may choose to use instead of private mobile wallets, according to Wang Leilei, a fintech consultant at the Shanghai-based financial industry consultancy Kapronasia. She said participants of a pilot run in Shenzhen earlier this month were asked to download a specific app for DCEP.

“If the digital money is to be allocated through the app, some people may switch to the app, while others may transfer it to WeChat or Alipay. It depends on consumers and the use case,” Wang said.

Alipay is owned by Ant Financial, an affiliate of Alibaba, which owns the South China Morning Post.


Mu Changchun, the head of the People’s Bank of China’s research institute for digital currency, at the 2nd Bund Summit.


However people decide to use the new digital yuan, though, it still faces an age-old problem similar to cash: counterfeiting.

“We have found counterfeit digital yuan wallets on the market,” Mu said at the summit without providing any additional details.

The central bank is currently running its first DCEP trials with designated institutions and merchants in China’s southern tech hub of Shenzhen. The city concluded the country’s largest test of the sovereign digital currency this month after local authorities gave out 10 million yuan (US$1.5 million) to more than 47,500 people by lottery.

The digital yuan was awarded in the form of “red packets” each containing 200 yuan that could be spent in designated shops. A total of 1.9 million residents signed up to take part in the giveaway.

Wang, from Kapronasia, noted that users who are not familiar with DCEP may be targeted by fraudsters. Consumers could be tricked into taking part in fraudulent digital currency schemes that have nothing to do with the central bank, she said. The fake currency would not be able to be used at authorised merchants.

PBOC’s Mu said reducing counterfeiting will require coordination between the different sides tasked with bringing the digital currency to ordinary users.

The DCEP currently operates on two tiers. The first involves the central bank, which issues the digital yuan. The second involves designated institutions such as commercial banks, which distribute the currency to users.

Digital wallets will also have to form their own unique visual identity and functions, Mu said.

Connecting designated operators and reducing payment barriers will require formulating business, technical, security and application standards, he said during his speech. He also noted that operators should work on developing their own features, including more payment and financial products.

Mu also underlined the need for “centralised supervision” from the central bank, creating a clear distinction between the digital yuan and private cryptocurrencies like the Facebook-backed Libra, to which it is sometimes compared. Supervision will allow the DCEP to “resist the erosion of cryptoassets and global stablecoins,” he said. Stablecoins are digital currencies that have their value pegged to other assets like commodities or national currencies.

Mu’s emphasis on centralisation also separates the digital yuan from cryptocurrencies like bitcoin, which run on a decentralised blockchain over a peer-to-peer network. Mu said last year that the PBOC is not looking at just one technical approach to managing its new digital currency, suggesting blockchain could be one of its tools. Whether the central bank uses it, Wang said commercial banks and other distributors can still choose to use the technology.

Newsletter

Related Articles

TIMES.KY
0:00
0:00
Close
Paper straws found to contain long-lasting and potentially toxic chemicals - study
FTX's Bankman-Fried headed for jail after judge revokes bail
Blackrock gets half a trillion dollar deal to rebuild Ukraine
Israel: Unprecedented Civil Disobedience Looms as IDF Reservists Protest Judiciary Reform
America's First New Nuclear Reactor in Nearly Seven Years Begins Operations
Southeast Asia moves closer to economic unity with new regional payments system
Today Hunter Biden’s best friend and business associate, Devon Archer, testified that Joe Biden met in Georgetown with Russian Moscow Mayor's Wife Yelena Baturina who later paid Hunter Biden $3.5 million in so called “consulting fees”
Singapore Carries Out First Execution of a Woman in Two Decades Amid Capital Punishment Debate
Google testing journalism AI. We are doing it already 2 years, and without Google biased propoganda and manipulated censorship
Unlike illegal imigrants coming by boats - US Citizens Will Need Visa To Travel To Europe in 2024
Musk announces Twitter name and logo change to X.com
The politician and the journalist lost control and started fighting on live broadcast.
The future of sports
Unveiling the Black Hole: The Mysterious Fate of EU's Aid to Ukraine
Farewell to a Music Titan: Tony Bennett, Renowned Jazz and Pop Vocalist, Passes Away at 96
Alarming Behavior Among Florida's Sharks Raises Concerns Over Possible Cocaine Exposure
Transgender Exclusion in Miss Italy Stirs Controversy Amidst Changing Global Beauty Pageant Landscape
Joe Biden admitted, in his own words, that he delivered what he promised in exchange for the $10 million bribe he received from the Ukraine Oil Company.
TikTok Takes On Spotify And Apple, Launches Own Music Service
Global Trend: Using Anti-Fake News Laws as Censorship Tools - A Deep Dive into Tunisia's Scenario
Arresting Putin During South African Visit Would Equate to War Declaration, Asserts President Ramaphosa
Hacktivist Collective Anonymous Launches 'Project Disclosure' to Unearth Information on UFOs and ETIs
Typo sends millions of US military emails to Russian ally Mali
Server Arrested For Theft After Refusing To Pay A Table's $100 Restaurant Bill When They Dined & Dashed
The Changing Face of Europe: How Mass Migration is Reshaping the Political Landscape
China Urges EU to Clarify Strategic Partnership Amid Trade Tensions
Europe is boiling: Extreme Weather Conditions Prevail Across the Continent
The Last Pour: Anchor Brewing, America's Pioneer Craft Brewer, Closes After 127 Years
Democracy not: EU's Digital Commissioner Considers Shutting Down Social Media Platforms Amid Social Unrest
Sarah Silverman and Renowned Authors Lodge Copyright Infringement Case Against OpenAI and Meta
Italian Court's Controversial Ruling on Sexual Harassment Ignites Uproar
Why Do Tech Executives Support Kennedy Jr.?
The New York Times Announces Closure of its Sports Section in Favor of The Athletic
BBC Anchor Huw Edwards Hospitalized Amid Child Sex Abuse Allegations, Family Confirms
Florida Attorney General requests Meta CEO's testimony on company's platforms' alleged facilitation of illicit activities
The Distorted Mirror of actual approval ratings: Examining the True Threat to Democracy Beyond the Persona of Putin
40,000 child slaves in Congo are forced to work in cobalt mines so we can drive electric cars.
BBC Personalities Rebuke Accusations Amidst Scandal Involving Teen Exploitation
A Swift Disappointment: Why Is Taylor Swift Bypassing Canada on Her Global Tour?
Historic Moment: Edgars Rinkevics, EU's First Openly Gay Head of State, Takes Office as Latvia's President
Bye bye democracy, human rights, freedom: French Cops Can Now Secretly Activate Phone Cameras, Microphones And GPS To Spy On Citizens
The Poor Man With Money, Mark Zuckerberg, Unveils Twitter Replica with Heavy-Handed Censorship: A New Low in Innovation?
Unilever Plummets in a $2.5 Billion Free Fall, to begin with: A Reckoning for Misuse of Corporate Power Against National Interest
Beyond the Blame Game: The Need for Nuanced Perspectives on America's Complex Reality
Twitter Targets Meta: A Tangle of Trade Secrets and Copycat Culture
The Double-Edged Sword of AI: AI is linked to layoffs in industry that created it
US Sanctions on China's Chip Industry Backfire, Prompting Self-Inflicted Blowback
Meta Copy Twitter with New App, Threads
The New French Revolution
BlackRock Bitcoin ETF Application Refiled, Naming Coinbase as ‘Surveillance-Sharing’ Partner
×