Alipay and WeChat Pay the two dominant players in China’s online payments marketplace are all set to see tough competition from the country’s very own central bank digital currency (CBDC) aka Digital Yuan. On Thursday, March 25, speaking during a panel discussion organized by the Bank of International Settlements (BIS), Mu Changchun, director of the People’s Bank of China’s digital currency research institute, briefed about the CBDC developments.
Interestingly, Mu said that one of the key reasons behind the PBoC developing Digital Yuan is providing a foundational back-up to WeChat Pay and Alipay. The two private players currently have a lion’s share dominating 98% of China’s mobile payments market. Explaining further Mu said:
“If there is something bad happens to them, financially or technically, that could bring negative impact on the financial system’s stability in China. To provide a backup or redundancy for the retail payment system, the central bank has to step up” while offer its own digital payments services.
Interestingly, the Chinese central bank has said that the Digital Yuan will co-exist with the two payments giant – WeChat Pay and Alipay. Besides, it will also co-exist with paper notes and other mobile payments platform. Over the last few months, China has been testing its Digital Yuan in some parts of its country. The Asian Economic giant is also planning for a complete rollout by Winter Olympic 2022.
As per the estimates of Bloomberg Intelligence, the Digital Yuan will have 9% shares in China’s digital …
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