According to a report published by VOA News, the affiliate group of Alibaba, Ant Group, has agreed to make a partnership with the Central Bank of China, also known as the People’s Bank of China. Both these entities have joined hands to work on a common goal, which is to create a platform for the development of the central bank digital currency (CBDC) of the country, which is known as Digital Yuan.
Chinese Central Bank, Ant, and Tencent
The Digital Yuan is also known as e-CNY or the Digital Renminbi. It will be promoted jointly by both the partners developing it, and the digital currency will be based on the affiliate of Alibaba. The Global Times has stated that the People’s Bank of China has been working with Ant and Tencent, which is a Chinese multinational company, for more than three years. They have co-developed the e-CNY or Digital Yuan by working together.
Tencent and Ant have recently been going through a lot of scrutinies by the government of China, but this has not stopped both of these companies from continuing their work on this project. The VOA News has also claimed that the People’s Bank of China requires a lot of assistance and guidance in building the infrastructure and the distribution channels of its CBDC. China is expecting that the Digital Yuan would be initially used in the local retail payments, and eventually, it would be adopted as a standard in the foreign countries.
The CEO of Geo Securities, Francis Lun, has told the VOA News that the affiliate of Alibaba, Ant, was asked by the Chinese authorities to hand over their database. This decision was made by the government of China because Ant is a major player in the e-payment market. It is one of the biggest payment providers and has control over more than 54% of the Chinese e-payment market.
E-CNY will be different from Bitcoin
The officials from the People’s Bank of China are saying that the Digital Yuan will have many unique features, and according to the report from VOA, it will be used as a surveillance tool by the Chinese government. It will also be used in the de-dollarization of the global financial system.