The Central Bank Digital Currency (CBDC) of China, the Digital Yuan, could serve as an effective alternative for the country’s primary retail payment services, WeChat Pay and Alipay, says Mu Changchun, a People’s Bank of China (PBoC) official. As the head of the digital currency research division of the PBoC, Changchun firmly believes that doing so should be the primary objective of the Chinese CBDC.
As per Bloomberg’s report, Changchun explains that 98% of the entire Chinese mobile payments market is comprised of WeChat Pay and Alipay. Suppose something terrible were to happen to one or both of them, it is only right to have a feasible backup payment option to sustain the country’s financial system’s stability. Changchun suggests that the Digital Yuan has the capability, perhaps even more, to serve just that.
At the same time, Changchun also urged the global central banks to cooperate with one another to ensure that each of their CBDCs is compatible and could co-exist with one another. CBDC from one side of the world should not impede another’s main purpose and capability – to sustain a particular nation’s financial and monetary stability, says Changchun.
The PBoC official’s remarks came amidst the growing concern that the Digital Yuan provides unrightfully authority insight about users’ financial behavior and personal data – implying that the nation still has a lot of ground to work up. Nonetheless, China remains atop the CBDC global race.