Benjamin Godfrey is a blockchain enthusiast and journalists who relish writing about the real life applications of blockchain technology and innovations to drive general acceptance and worldwide integration of the emerging technology. His desires to educate people about cryptocurrencies inspires his contributions to renowned blockchain based media and sites. Benjamin Godfrey is a lover of sports and agriculture.
While China has not yet announced when it wants to officially launch the e-CNY nationwide, it is set to continue the pilot tests during the 2022 Beijing Winter Olympics.
A recent Reuters report has revealed that six big Chinese State-owned banks in Shanghai are advertising the Digital Yuan ahead of a May 5 Shopping Festival in the city. The banks are reportedly canvassing for the Digital Yuan (e-CNY) which is the country’s Central Bank Digital Currency (CBDC) project by asking users to download the digital wallets that support the new currency.
China has long been in the race per its CBDC development. Last year, the People’s Bank of China (PBoC) began a full-scale retail pilot testing for the Digital Yuan. These tests have been carried out in major Chinese cities including Beijing, Suzhou, and Shenzhen amongst others. The test in Beijing, in particular, drew in about 50,000 participants with the Chinese government doling out 10 million Digital Yuan valued at $1.5 million.
The scheduled shopping festival in Shanghai is billed to be a continuation of the pilot tests and the target per the Reuters report is to wade off the dominance exerted by Alipay backed by Alibaba Group Holding Ltd (NYSE: BABA) and WeChat Pay, a subsidiary of Tencent Holdings Ltd (HKG: 0700). Both Fintech giants control as much as 94% of the digital payment ecosystem in China, and the PBoC hopes the e-CNY can tone down these firm’s influence.
Major Chinese banks have begun processing applications for the Digital Yuan Wallets as reported back in March, and the efforts by the Shanghai State banks including the Industrial and Commercial Bank of China, Agricultural Bank of China, Bank of China, and China Construction Bank is geared towards complementing the national rollout efforts.
Chinese Digital Yuan Brandishes Security and Ease of Use
According to the Reuters sources who pleaded anonymity, the Chinese Digital Yuan is arguably easier to use compared to the payment infrastructures from the duo of Alipay and WeChat Pay.
“People will realise that digital yuan payment is so convenient that I don’t have to rely on Alipay or WeChat Pay anymore,” a bank official said.
The potential ease of use of the e-CNY has further been confirmed by HSBC Holdings plc (LON: HSBA) with the banking giant nursing the belief the CBDC will gradually dominate the payment ecosystem in the country.
“The e-CNY’s ease of use will likely be comparable to Alipay and WeChat Pay, while its security function will likely be higher, and as sophisticated as Bitcoin,” HSBC wrote in a recent report, adding that it anticipates the digital currency to “proliferate” within China.
Additionally, it was pointed out that one of the core aims of the Shanghai Digital Yuan pilot tests and any such the PBoC plans to conduct is aimed at securing the big data control as it relates to the payment ecosystem.
One of the sources said Alipay and WeChat Pay controls “an ocean of data” and that the rollout of the e-CNY might help put the government back in control of this big data.
While China has not yet announced when it wants to officially launch the e-CNY nationwide, it is set to continue the pilot tests at the 2022 Beijing Winter Olympics where foreign athletes and visitors will get to use the Digital Yuan.