The People’s Bank of China is purportedly planning to use its digital currency electronic system (DCEP) to target the dominance of technology giants like Alibaba and Tencent in the digital payments sector. Interestingly, the report comes only a few days after the central bank’s claims prompt a top antitrust agency to launch a probe against Alipay and WeChat Pay for using their dominance to eliminate competition. The central bank is currently testing its digital currency in many cities in the country.
“The PBoC will target the market dominance of Alipay and WeChat pay.”
According to the Financial Times report, even regulators and executives of Alibaba’s financial group Ant agreed that the Chinese central bank would target the market dominance of Alipay and WeChat pay. Currently, Alibaba’s financial subsidiary Alipay and Tencent’s WeChat Pay, control most of the digital payments across China while banks are left far behind in the competition. In the first quarter of this year, Alipay processed almost 56% of all mobile payments in China. The national digital currency dubbed as DCEP is being awaited eagerly in the world’s most populated country.
China to become the first major nation to have its CBDC.
China is all set to become the first developed nation to have its own national digital currency. The People’s Bank of China has been working on its national digital currency for the last five to six years, and now it is very near issuing it to the general public. The national digital currency dubbed as Digital Currency Electronic Payment (DCEP) is currently being tested in many cities across the country.
Central banks across countries are currently exploring CBDCs, and many of them have made quite an impressive progress. An earlier report by the Bank for International Settlements had said that the ongoing pandemic had amplified the need for central bank digital currencies.