- Digital yuan will be compatible with AliPay and WeChat, but not as a competitor.
- However, the digital currency won’t be distributed via private mobile payment platforms.
As the Republic continues to trial and updates necessary factors to ensure the feasibility of the digital yuan, the central bank official recently clarified that the digital currency’s relationship with AliPay and WeChat. Many people had earlier speculated that the Chinese digital currency might affect the monetary transactions on these two payments platforms. However, it may not entirely be the case.
Chinese CBDC will be compatible with AliPay and WeChat
During a summit in Shanghai on Sunday, the PBOC’s head of the research institute for digital currency, Mu Changchun, clarified that the long-planned digital yuan would not compete with the payment platform when it launches. AliPay and WeChat are China’s biggest digital payment platforms. They accounted for about 94 percent of all the digital payments in the country during the second quarter of this year.
Changchun explained that the digital currency and the two payment platforms don’t belong in the same dimension. “WeChat and Alipay are wallets, while the digital yuan is the money in the wallet,” he added. However, the Chinese digital currency is designed to be compatible with both platforms. Thus, users can equally choose to transfer and spend the digital currency from both platforms, according to a fintech consultant, Wang Leilei.
Fake digital yuan wallets surface
Leilei further mentioned that the Chinese digital currency would not be distributed via private mobile wallets. An official wallet application is being developed for the digital currency. She pointed out how the 50,000 persons that participated in the Shenzhen giveaway were asked to download a certain app to receive the digital currencies. So, after receiving the digital yuan, the holders can choose to spend it from the app or transfer to AliPay or WeChat.
Another issue raised about the digital currency wallet is counterfeiting. The Chinese bank official, Changchun, disclosed that a counterfeit digital wallet for China’s CBDC was recently discovered. He failed to provide additional information about the fake wallet.