China, the most populous country in the world, has made leaps and bounds in creating a digital central bank currency compared to many other countries. With each passing day, China’s digital yuan is nearing large-scale adoption as well-known companies like e-commerce giant JD.com, Mastercard, Ant Group, and Tencent have strengthened the company.
China’s digital yuan seems almost ready, JD.com employees have paid in e-CNY
China’s central bank digital currency (CBDC) produced by the People’s Bank of China (PBoC) has many names. Some call it the “e-CNY”, others the “digital yuan” or “digital renminbi” and it is also called “Digital Currency Electronic Payment” (DCEP).
The country has been developing a CBDC for years and more recently the PBoC has launched the project through banks and companies accepting it and giving away digital red envelopes.
In late March, it was announced that Chinese citizens could apply for a digital yuan wallet from six state-run financial institutions. PBoC is now working with e-commerce company JD.com and with the help of Alibaba as some JD.com employees received their salaries in the form of the digital yuan.
Reports Note JD.com employees participating in the study started the program back in January. It’s also not JD.com’s first test run with the CBDC, as the company participated in Airdrop promotions and Chinese citizens were able to use the digital currency to pay for items hosted on the online store.
Additionally, the Alibaba Group was also involved before the employees were paid at the CBDC, as the central bank worked directly with a fintech subsidiary of the Alibaba Group called Ant Group.
Alibaba Group, Tencent and Ant Group are some of the key players in the PBoC
A current voanews.com report insists that both Tencent and Ant Group have bolstered the CBDC build over the past three years. In addition to working with Ant Group, the digital yuan reportedly uses Ant’s database called “Ocean Base”. The Ant Group was spun off from Ocean Base in June 2020 when it launched a proprietary database service and mobile development platform called mPaaS.
In March, Bitcoin.com News reported as the head of the People’s Bank of China-run Digital Currency Research Institute, Ma Changchun. The PBoC official said the digital yuan is not completely anonymous but may offer “controllable” privacy. In the end, however, the Communist Party was in control, Francis Lun, CEO of Geo Securities Ltd. in Hong Kong explained.
“The Chinese authorities are telling Ant to hand over your big data to the central bank,” said Francis Lun. “The data will not remain in private hands because the Communist Party is in charge.”
Mastercard wants to process cross-border digital yuan transactions
JD.com, Ant Group and Tencent have all been major players when it comes to China’s CBDC, but now Mastercard is keen to join in too. The South China Morning Post (SCMP) has detailed This Mastercard aims to play a role in China’s CBDC by helping with cross-border transactions.
Mastercard Asia Pacific Co-President Ling Hai told SCMP in an interview that the payment company is awaiting regulatory approval to open an onshore card business using the digital yuan. Mastercard is already doing this with the central bank in the Bahamas when the Caribbean island recently issued a sovereign digital currency called “sand dollars”.
In 2020, the PBoC approved Mastercard’s application to join the company. Currently, the payment company is working with Chinese regulators to obtain a license.
“Once we are licensed, our priority is to convey to people that our brand is synonymous with the Chinese domestic market,” concluded Ling Hai, Managing Director of Mastercard Asia Pacific.
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