Ant Group Co (螞蟻集團)-backed MYbank (網商銀行) is to join China’s digital yuan (e-CNY) trial, as the People’s Bank of China (PBOC) charges ahead with rolling out an electronic currency system that could uproot the nation’s payments landscape.
MYbank’s service is soon to be introduced to the central bank’s digital yuan app, people familiar said, requesting not to be identified because the matter is private.
Tencent Holdings Ltd (騰訊)-backed WeBank (微眾銀行) will also participate, one of the people said.
Photo: Aly Song, Reuters
The e-wallets from the two firms will have exactly the same functions as those from the six state-owned lenders in the trial, the person said.
Adding the two banks to the pilot would help the PBOC expand its influence and user coverage in its push to establish the first digital national currency from a major central bank.
When the PBOC first announced its plans, it was viewed by some as a government move to reclaim the 293 trillion yuan (US$45 trillion) payments industry from to Ant’s Alipay (支付寶) and Tencent’s WeChat Pay (微信支付).
As one of the parties participating in the research and development of China’s e-CNY, MYbank will “steadily advance the trial pursuant to the overall arrangement of the People’s Bank of China,” the company said in an e-mailed response without elaborating.
WeBank declined to comment in an e-mailed statement.
The PBOC did not immediately respond to a fax seeking comment.
In China, smart-phone-based electronic payments are ubiquitous, used for everything from bus-rides and convenience stores to vegetables at the local market — and 94 percent of those mobile transactions are controlled by the two firms.
Yet the tech giants are facing tougher times ahead under the government, which has already stepped up oversight of the fintech industry and unveiled tougher antitrust regulations for the Internet arena.
The digital yuan is being rolled out at a time when China is trying to curb monopolies in the payment space, potentially dealing a blow to Alipay and WeChat Pay’s growth.
Ant is the biggest shareholder in MYbank, owning a 30 percent stake. Tencent is the biggest stakeholder in WeBank, holding 30 percent.
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