digital yuan

China’s digital yuan is set to work alongside WeChat and Alipay

China’s digital yuan is set to work alongside WeChat and Alipay

Quick take

1 minute read

  • The quick development time for the digital yuan in China.
  • Chinese bank executive confirms that the CBDC project will work with WeChat and Alipay rather than against them.

Central-bank digital currencies have been the talk of the town throughout the crypto space over the course of this year. A lot has happened over the course of 2020 and the topic of CBDCs has primarily been at the forefront of discussions. 

China is getting ready to release its digital yuan in the country and according to reports, it will be allegedly compatible with some of the biggest payment networks in the country.

The head of the People’s bank of China’s digital currency research team, Mu Changchun has said that the central bank-backed currency will be compatible with wallets such as WeChat pay and Alipay.

According to a local news report, the executive said that the digital yuan will not be seen as competition two payments networks such as WeChat and Ali pay as he went on to say:

“They don’t belong to the same dimension. WeChat and Alipay are wallets, while the digital yuan is the money in the wallet.”

Interestingly, previous reports have suggested that the digital yuan would actually be a direct alternative to these payment networks.

At the conference, the executive further went on to say that mobile wallets for the digital yuan are currently facing the problem of counter fitting adding that there were numerous fraudulent wallets in the market as we speak. 

He went on to say though that it would only be possible to reduce the impact of these counterfeit wallets if all parties involved can take the necessary precautions whether that be the central bank itself or the user.

The CBDC project from China has had a quick development time as over the weekend, it published a draft law to provide regulatory framework and legitimacy for its upcoming currency. Currently, the bank is looking into pilot tests across China for the upcoming project.

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