China’s Central Bank Works with Ant, Tencent to Develop Digital Currency
China’s central bank has signed a strategic cooperation agreement with Ant Group, the fintech affiliate of Alibaba Group, to help build a technical platform for its sovereign digital currency, state media reported.
China has been developing its electronic yuan, or e-CNY, since 2014 with an aim to replace some of the cash in circulation. In lieu of a timetable for its official launch, the digital cash will first be used for retail payments domestically before it is used abroad, Chinese authorities have said.
The two sides will jointly promote the development of the e-CNY, based on Ant’s database, Ocean Base, and its mobile development platform, mPaaS, according to the state tabloid Global Times.
“The Chinese authorities are telling Ant that you should hand over your big data to the central bank. The data won’t remain in private hands since the Communist Party is the boss,” Francis Lun, CEO of Geo Securities Ltd. in Hong Kong, told VOA by phone.
The Financial Times has reported that Beijing has asked Ant to turn over its data to a new state-controlled credit scoring company, which would be run by former executives of the central bank while serving other financial institutions, including competing with Ant’s lending arms.
Lun said that the digital yuan, domestically, will allow the government to monitor every transaction of the users “like a big brother.” Its use abroad it will allow China to bypass the international settlement system, dominated by the U.S. dollar, in what he called a de-dollarization attempt.
China’s general public will not notice any change, she said, because Ant’s Alipay or Tencent’s WeChat Pay will remain what consumers see, while the central bank will likely work as the engine in the background for both fintech platforms.
https://www.voanews.com/east-asia-pacific/voa-news-china/chinas-central-bank-works-ant-tencent-develop-digital-currency
https://archive.ph/m3RuT