According to VOA News, Ant Group, a subsidiary of the Alibaba group, has signed a partnership agreement with the People’s Bank of China. The partners will work to create a platform for the country’s central bank digital currency (CBDC). Voice of America is quoted by the Chinese government publication Global Times.
The Digital Yuan development, also known as Digital Renminbi or e-CNY, will be “co-promoted” by partners and based on a subsidiary of Alibaba. The Global Times reported that banking institutions have partnered with Ant and Chinese multinational conglomerate Tencent for over 3 years. Together they developed the Digital Yuan.
Ant and Tencent have been rigorously vetted by the Chinese government. However, this did not stop them from working on the project. VOA says the People’s Bank of China needs help building CBDC infrastructure and distribution channels. China expects e-CNY to be used for local retail payments and then adopted in foreign countries.
Francis Loon, CEO of Geo Securities, told VOA that Chinese authorities have ordered an Alibaba subsidiary to provide its database. Ant is one of the largest payment service providers in China and controls over 54% of the country’s electronic payments market, according to the report. The company offered to help, but the government refused due to concerns about a possible “conflict of interest.” Lun said:
Chinese authorities tell Ant that you need to send big data to the central bank. The data will not remain in private hands, as the Communist Party is the boss.
The digital yuan is not like bitcoin
The authorities of the People’s Bank of China said their CBDCs will have unique characteristics. According to the VOA report, the digital yuan will become a government surveillance tool. He compared Chinese electronic CNY to George Orwell’s classic 1984, the opposite of Bitcoin.
The digital currency will allow China to track all transactions and will be part of an effort to “de-dollarize” the international financial system. However, the distribution phase will be critical to the long-term survival of the CBDC. Lin told Voice of America the following:
Working with the central bank [to launch the e-CNY]These fintech giants will be relieved of pressure as part of the regulator’s antitrust investigation. Their monopoly is hard to break unless a strong competitor such as e-CNY emerges with at least a third of the market share.
Through her Twitter account, Dovi Wang, Founding Partner of Primitive Crypto, shared an image of a RMB / DECP Digital Currency / Electronic Payment (RMB / DECP) digital wallet. The wallet is still in testing and will allow users to send and receive money with a simple swipe up or down. Pale mentioned:
This is a beta version, which is being tested in Shenzhen, some municipal payments and public economic activities will be accepted first, and then merchants will be accepted. China is really good at deploying new infrastructures on a large scale, and this will be no exception.
Bitcoin is trading at $ 56,743.87 with a 1.8% loss on the daily chart. On the weekly and monthly charts, BTC has a profit of 13.3% and a loss of 3.4%, respectively.