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China’s digital currency ‘to provide backing’ for Alipay, Tencent’s WeChat Pay if ‘something happens’ to internet giants
A key goal of China’s sovereign digital currency is to maintain financial stability in case “something happens” to Tencent’s Alipay and WeChat Pay, the two private platforms that dominate the country’s vast digital payments market, the bank said. central of the country. China is moving forward with the rollout of its digital yuan, conducting pilot tests in cities across the country as it moves toward a cashless society that will give authorities unprecedented powers to oversee the nation’s payment and financial system. . At the same time, Beijing has stepped up scrutiny of its extensive fintech system, showing how serious it is to control neglect among the nation’s internet giants and reduce the risk of financial contagion in the world’s second-largest economy. the most important themes and trends from around the world? Get the answers with SCMP Knowledge, our new curated content platform with explanations, FAQs, analytics, and infographics from our award-winning team. In an online panel discussion on Thursday, Mu Changchun, CEO of the People’s Bank of China (PBOC) digital currency institute, described how the two political agendas fit together. To provide a backup of the retail payment system, the central bank has to step up and provide a central bank digital currency service Mu Changchun “Everyone knows that we have two big players in the mobile payment retail market, Alipay and Tencent Pay “. Mu said at the event hosted by the Swiss-based Bank for International Settlements (BIS). “They have already taken over 98 percent of the mobile payments market. “If something happens to them, financially or technically, it will definitely have a negative impact on China’s financial stability. “To provide support for the retail payment system, the central bank must step up and provide a central bank digital currency service.” Mu’s comments come amid a crackdown on monopolistic practices in China’s “platform economy,” where Ant Group, which owns Alipay, and Tencent have enormous influence. What is China’s sovereign digital currency? Authorities fined Tencent and several other digital giants earlier this month and last year halted the successful debut of Ant Group’s shares on the Shanghai and Hong Kong stock exchanges. The People’s Bank of China also published a new draft of the rules in January in an effort to reduce the influence of “non-bank service providers” on online payments. China, already a world leader in digital payments, aims to be the first major economy to introduce a central bank digital currency (CBDC). Its successful launch could boost the international use of the yuan and reduce the risks associated with cryptocurrencies like bitcoin. The PBOC has been researching and designing a CBDC since 2016. Mu said it was important for central banks to cooperate to establish a broad set of “values”, including monitoring and information sharing, to ensure compatibility between different sovereign digital currencies. . Interoperability must be enabled between CBDC systems in different jurisdictions. Mu Changchun “Central bank digital currency supplied by one central bank should not impede the ability of another central bank to carry out its mandate of monetary and financial stability,” Mu said. Mu said cross-border flows of digital currencies must comply with each jurisdiction in question and that “the flow of information and the flows of funds should be synchronized, in order to make it easier for regulators to track transactions for compliance.” “Interoperability needs to be enabled between CBDC systems of different jurisdictions,” said Mu. “We also propose a scalable and supervised currency exchange platform compatible with DLT [distributed ledger technology] or other technologies. “Mu said the People’s Bank of China had already shared its ideas on information sharing and monitoring with other central banks and monetary authorities. In February, China joined Hong Kong, Thailand and the United Arab Emirates. (UAE), together with the BIS, to explore cross-border digital currency payments.However, some of the major central banks, such as the US Federal Reserve, are cautious about launching a CBDC. “Because we are the world’s leading reserve currency, we don’t need to rush this project, we don’t need to be the first to market. A dollar CBDC would have potentially large implications here and around the world,” said Jay Powell, president of the Federal Reserve, who spoke on another panel at the same event on Monday. “We would make sure to think carefully about all of that and engage very broadly with audiences around the world, particu here in the US before we even get anywhere near a decision. ” A BIS survey released in January found that 86 percent of central banks have been actively participating in some form of CBDC investigation. The survey also found that retail CBDC-related work is gaining relative popularity, with more central banks looking at both wholesale and retail or narrowing their scope of work to retail only. While the euro zone has been exploring the possibility of implementing a CBDC, the German central bank Deutsche Bundesbank is concerned that a digital euro could pose risks to banks. “There are other ways to meet consumer or business needs than a central bank digital currency, so there is no rush or urgency to introduce CBDC. I think it’s something we should think about very carefully, ”said Jens Weisman, head of the Bundesbank at the BIS event on Monday. Bank of Japan Governor Haruhiko Kuroda said last week that the central bank needed to “thoroughly prepare” for the time it might take to issue its own digital currency, but there are currently no plans to issue a CBDC. in yen. China Morning Post: China’s Digital Currency – Central Bank Seeks To Ensure Consumers Data Protection And Privacy Beijing Is Exploring Cross-Border Digital Yuan Payments By Joining Hong Kong, Thailand, United Arab Emirates And The Bank for International Settlements This May affect Alipay, WeChat Pay China’s antitrust regulator fines big tech companies, including Tencent and Baidu, for failing to report acquisitions China’s central bank defines monopoly for the first time in the antitrust service market restriction The world’s largest online payment ‘for Alipay, Tencent’s WeChat Pay if’ something happens’ to the Internet giants first appeared in South China Morning Post est news from the South China Morning Post download our mobile app. Copyright 2021.
