People’s Bank of China and Alibaba Group’s affiliate Ant Group have combined forces to create a platform supporting the central bank electronic money. In accordance with Global Times, PBoC was working with Ant and Tencent for the previous 3 years on developing the e-CNY.
A Move Towards e-CNY
VOA News declared on May 3rd the Chinese central bank and Alibaba’s partner Ant Group have signed a deal on developing a digital yuan with mutual efforts. The move will probably be”jointly promoted” along with also the development is going to be dependent on Ant’s Group platform.
The report revealed that the PBoC was working with Ant and Tencent on the electronic yuan too in the previous 3 years. Despite some tension between Alibaba’s affiliate and the multinational technology company Tencent made by the Chinese government, both organizations have stayed committed to building the CBDC’s construction and distribution channels.
However, Francis Lun — CEO of Geo Securities — raised concerns regarding the coalition between a few of the largest payment suppliers in the country — Ant Group and also the political situation in China:
“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 until the Communist Party is the boss.”
In return, Ant demanded to direct the development and contested that”too much government intervention would drag the industry down.”
The Unique Nature Of The e-Yuan
Officials from China’s Central bank revealed their CBDC will probably be one of some kind. According to the VOA report, the e-yuan will be a”tool for government surveillance.”
Francis Lun stated in his turn that the CBDC will enable the government to control every user’s transaction”like a big brother.” He expressed high hopes that when it spreads abroad the electronic yuan can provide China a huge advantage and at some point, the nation can surpass the economic dominance held by the US.
Lun reasoned that PBoC looks at the partnership as win-win cooperation for the involved parties:
“By collaborating with the central bank [to launch the e-CNY], these fintech giants will be revealed from pressure in the regulator’s anti-monopoly probe.”
Even though the mass opinion about the digital yuan is that its Aim is to hasten the decline of the US dollar, Anne Stevenson-Yang — research manager of J Capital Research contradicted:
“I think there’s too much focus being placed on the idea that this is a totally distinct currency and they are in competition.”