PBoC to collaborate with Ant and Tencent to develop China digital currency
- Ant Group and Tencent have vowed to provide active support to the rollout of the country’s digital currency
- Ant Group for the first time disclosed a detailed timeline of its work on China’s digital currency
- The digital yuan will coexist with hard currency for a long time and there will be no competition with the dual payments platforms
Earlier last month, the People’s Bank of China (PBoC) instructed Ant Group to restructure its operations after a regulatory clampdown. Amidst all of the overhauling, it has come to light that China’s largest fintech Ant has been quietly working with the country’s central bank on the nation’s sovereign digital currency since 2017.
The information was disclosed at the end of last month’s Digital China Summit, an annual trade fair. Both Ant and Tencent Holdings showed off via prominent posters their history of cooperation with the PBoC on the digital yuan. It is in fact the first time that Ant, which called off its mega initial public offering (IPO) in Hong Kong and Shanghai late last year, has disclosed a detailed timeline of its work on China’s digital currency.
How Ant & Tencent contributing to the digital currency in China
According to reports, the poster at the event indicated that Ant was invited to join the research and development of the digital yuan in late 2017. It also showed that MYbank, an Ant-backed online bank, became one of the operational institutions to offer the digital yuan. Two years later, in June 2019, China’s digital currency institute began to use Ant’s mobile app development platform mobile platform-as-a-service (mPaaS) to develop its app.
In July 2020, Ant officially tested China’s digital yuan and by November 2020, the fintech company had deepened cooperation with the central bank’s digital currency institute over many projects, including OceanBase database. Then the group in December 2020, launched a digital yuan trial in Shanghai, according to the company’s poster. It also showed that Ant started to roll out the digital yuan in different parts of the country for a variety of industries at the start of this year.
As for Tencent, its posters at the event showed that the video games and social media giant were involved in digital currency tests from February 2018. By November that year, the Shenzhen-based company had formed a team of experts to help with system development. Reports indicated that Tencent has been taking part in the PBoC’s e-CNY project from the start, and will continue to carry out pilot trials in accordance with the guidance of the PBoC.
Even Huawei Technologies Co said in a statement that it has been involved with the digital yuan since November 2019. The telecommunications equipment giant helped work on technical standards, and last year its Mate 40 smartphone model became the first smartphone to feature a hardware-powered wallet for China’s digital currency. Then there’s Alibaba rival JD.com, whose partnership with the PBoC started in September 2020. In January this year, it used the digital yuan to disburse the salaries of some of its employees. It has also provided technology and service support for trial programs in Suzhou, Beijing, and Chengdu.
Although China has yet to officially launch, the digital currency tech has been tested in major Chinese cities including Beijing, Shanghai, and Shenzhen. In fact, the country was the first major economy to begin exploring its own digital currency in 2014.