China continues to make significant progress in creating the digital Yuan. However, Jerome Powell and Christine Lagarde, key central bank figures, appear to be procrastinating on the subject of central bank digital currencies.
Digital Currency Electronic Payment
Though its central bank helms china’s Digital Currency Electronic Payment project (DCEP), it draws significant participation from the private sector. Many of the major private sector firms, from tech giants to e-commerce conglomerates, are playing pivotal roles in this quest.
DCEP tests also continue to expand with several trials runs through lotteries taking place across several cities. Banks like the Industrial Commercial Bank and the Agricultural bank have taken leading roles in these pilot protocols. They are creating user wallets for their consumers.
Major Digital Yuan players
Though there are many DCEP pilots across China, the absence of the two largest electronic payment platforms in the country, AliPay, and WeChat Pay, is causing significant speculation. Ant Group and Tencent operate these platforms.
Moreover, the digital yuan project has been touted as Beijing’s response to curbing the duopoly held by both companies. However, Jack Ma, the co-founder of Alibaba, seemingly withdrew from the public eye. Ma’s withdrawal happened after his comments got labelled as criticism at Chinese Finance Regulators.
However, the rumblings got intensified after his withdrawal. Moreover, in a Bund Finance Summit held in Shanghai, this billionaire accused Beijing of shifting the innovation while characterizing all the Chinese Banks as pawn shops.
However, Ant group was still under China’s intense regulatory scrutiny. Additionally, several reports emerged stating that a financial holding company has been involved in digital Yuan. This revelation indeed means that Ma’s firm and the People’s Bank of China (PoB) have been collaborating for DCEP since 2020.
Additionally, the Ant-Group-backed MyBank is one of the financial institutions to offer the digital Yuan. In February, PoB confirmed the Tencent-backed WeBank as one of the participants of the expanded digital yuan trials.