A number of China’s biggest state banks are promoting the digital yuan as a better payment method to the leading payment providers, Alipay and WeChat Pay.
A Reuters report on Monday shows six of the largest banks in China are promoting the central bank digital currency (CBDC) in Shanghai.
Consumers and retail outlets are being urged by banks to download the digital wallet and make purchases at an upcoming online shopping festival on 5 May, sidestepping Ant Group’s Alipay and Tencent’s WeChat Pay, Cointelegraph reports.
According to one bank official involved in the CBDC trial rollout, the CBDC is superior to Alipay and WeChat Pay: “People will realise that digital yuan payment is so convenient that I don't have to rely on Alipay or WeChat Pay anymore.”
During an online panel last month, Mu Changchun, head of the PBoC's digital currency research institute, said Alipay and WeChat pay make up 98% of China’s mobile market, which would be risky to the country’s financial system should any problems arise.
Changchun said the People’s Bank of China would not compete directly with either payment means, but acts as a backup to “ensure financial stability in case something happens” to them.
The rollout of the country’s CBDC will allow the government to take control over financial data accumulated by the country’s top payment providers.
A bank official told Reuters: “Big data is wealth. Whoever owns data thrives. WeChat Pay and Alipay own an ocean of data.”
The six banks involved in the pilot scheme include some of China’s largest, such as The Industrial and Commercial Bank of China, Agricultural Bank of China, Bank of China, HSBC, and China Construction Bank.
At the beginning of this month, China completed its first cross-border trial of the digital yuan with Hong Kong.