Digital yuan to stop Alibaba's dominance in fintech
According to the yesterday’s Financial Times report, the digital yuan will play the same role in China's economy that Alibaba and Tencent now have.
Digital yuan will strengthen the role of the National Bank
Sources close to the People's Bank of China announced the financial institution's plans to simplify payments and interbank settlements in the country, while developing operations within the country.
Alipay is currently the industry leader with 55% of China's $19 trillion mobile payments market in 2020. The challenge for China's future national cryptocurrency is to change this order of things.
“They want a more level playing field for the banks. Alibaba and Tencent so dominate retail payments while banks are less active in electronic payments,” said a senior official at the Hong Kong Monetary Authority.
China strives for excellence in the global economy
But it turns out that fighting the influence of private companies is not the only goal of the crypto-yuan. The Chinese authorities plan in this way to oust the dominance of the dollar from the world financial markets.
At the same time, the senior executive of the payments division at Alibaba said his company is involved in the digital yuan discussion.
“In principle, we are supportive. But digital is still a small part of the payments [industry]. The speed of growth, though, is because of what Alipay and Tencent have done,” noted the director of Ant Finance.
Digital currencies and blockchain are among the main directions of China's development for the next 5 years. The digital yuan is already being tested on Didi's passenger transportation platform.