Tencent’s WeBank and Ant Group’s MyBank will participate in digital yuan trials, Chinese media reported.
Under the supervision of China’s central bank the People’s Bank of China (PBOC), WeBank and MyBank are preparing to join the digital yuan trials. China’s six biggest banks have been conducting the digital yuan trials with digital yuan wallet offering, to enable users to transfer money and make payments with the central bank-issued digital currency. WeBank and MyBank will offer the same features piloting digital yuan.
WeBank and MYbank’s participation would mean the first time China’s FinTech sector banks are entering the digital yuan trial space.
Accounts in the two banks will soon become available on the digital yuan wallet app, which will connect with different bank accounts and transfer money to the wallet – similar features as Ant’s AliPay and Tencent’s WeChat Pay.
Ant’s and Tencent’s respective digital payment apps account for a respective 56% and 38.8% of China’s digital payment market, according to a report from market research firm iResearch.
Chinese Investors Flocked to Cryptocurrencies
China’s increasing trials suggest that the country’s digital currency is becoming real by the day. If and when it is launched, the digital yuan would be the first national digital currency from a major country.
China’s digital yuan is positioned to offer more opportunities for Chinese investors, who are increasingly attracted by Bitcoin (BTC), as the cryptocurrency rose and reached new all-time highs.
Since last year, affluent Chinese have reportedly flocked to cryptocurrencies as an investment, and a safe haven for their assets. However, there are no hard figures on how much Chinese investors are putting into the largely untraceable world of crypto.
Bitcoin, the largest cryptocurrency by market capitalization, is now trading at $52,362, down 8.7% over the previous 24 hours. Despite a recent fall, Bitcoin’s price has recorded a 82% growth year-to-date.
China’s state media has warned that people should be skeptical of Bitcoin’s volatility and risk, suggesting that the digital yuan was backed by strong financial support by the government, which will form a key part of the country’s future development in the digital currency sector.