Alibaba’s Ant Group working with China’s Central Bank for Digital Yuan
Alibaba’s Ant Group has partnered with PBoC to support e-CNY. It will be an excellent move for the country towards pushing for the adoption of the CBDC.
The People’s Bank of China has come together with Ant Group and Tencent to develop the e-CNY. The partnership has been ongoing for three years now. Ant Group is an Affiliate of Alibaba, while Tencent is an Affiliate of WeChat. The two are the leading payment service providers in China.
Step closer to launching CBDC
According to a publication on VOA news, the Peoples Bank of China and Ant Group have entered into a deal whereby the two will work jointly to develop a robust digital yuan. The development will be based on the platform provided by Ant Group.
This move comes as a surprise given that Alibaba and Tencent have been under heavy regulations by the Chinese government. However, the step shows that the government and institutions are fully committed to creating a robust structure regarding a CBDC and create a reliable distribution channel.
The CEO of Geo Securities, Francis Lun, has raised concerns about the collaboration of Ant Group and the Chinese government. According to Lun, the Chinese government wants to control Big Data available on Ant Group’s platform. On the other hand, Ant Group intends to take the lead role in developing the e-CNY to reduce government intervention, which may hinder the success of the CBDC.
Features of the digital Yuan
According to some executives from the PBoC, the CBDC will have unique attributes that will distinguish it from the rest. The VOA publication adds that the e-CNY will be used by the government to enable surveillance of the industry
Francis Lun also stated that the digital yuan would be used by the government to monitor transactions. He further added that if the digital yuan achieves global reach, it will give China economic dominance and even overthrow the supremacy of the US dollar.
Regarding the partnership with Ant Group and Tencent, Lun stated that all parties involved would benefit. The two leading payment service providers will be under less pressure from the government regarding their business activities.
Most people have stated that the digital yuan may be used to undermine the US dollar. However, the US government has noted that the US dollar will maintain its dominance in the future. This has also been discussed by Anne Stevenson Yang of J Capital Research, who stated that people were viewing the e yuan as a distinct currency in competition with the US dollar, but this was not the case.