According to the People’s Bank of China’s (PBoC) head of digital currency research, Mu Changchun, the forthcoming digital yuan will work with mobile payment giants Alipay and WeChat Pay. Mu then clarified that the digital yuan does not intend to compete with the aforementioned payments platforms but instead aims to work alongside it. As per Mu, Alipay and WeChat will serve as the wallets, while the digital yuan will be the money that goes inside said wallets – fully contradicting the floating rumors that the Chinese CBDC targets to replace the two.
Although not officially launched yet, the digital yuan is already accessible to some users through exclusive mobile wallet software. Mu admits that the digital yuan is still facing significant hindrances, such as the instances of several dummy wallets popping up in the market. According to him, mitigating such adverse effects on the digital yuan would only be possible with the coordination of the central banks and the parties involved.
That being said, it is clear to see that China still has high hopes for the CBDC project. In fact, several prominent names in the industry and finance itself went out of their way to give praise to the promising digital yuan.
High praises for the digital yuan
Jack Ma, the recently retired founder of the prominent Alibaba Group, praised the digital yuan at his most recent speech at the Shanghai Bund Summit – stating that the blossoming project would undoubtedly play a significant role in the future of global finance. According to Ma, the current financial framework of Basel Accords does not fit the ever-growing economy of China anymore.
A brand new approach is a must, and nothing better suits China’s continual economic evolution than digital currencies. Jack Ma firmly believes that China must now focus on development rather than persistent risk control, which the digital yuan explicitly provides.