China expands the initiative of DCEP to Chengdu, making the future of WeChat Pay and Alipay brightened. This trial is foreseen as the biggest trial in the digital yuan testing phase.
Liu Xiaochun told Caijing, the Beijing magazine, that the Chinese Bank is confidently issuing the digital yuan. This is due to its positive outcomes from several cities.
China is launching its first-ever fully adapted central bank digital currency (CBDC). The government of China has given out the digital yuan as a test. Authorities are encouraging people and retailers to accept it as a payment method.
There had been six trials before the Chengdu one, with the distribution of almost 120 million digital yuan. An additional 40 million digital yuan is allocated for the Chengdu trial to conclude on the 19th of March. Analysts believe that one day digital yuan could dominate over the US dollar in international trade.
According to iResearch, Alipay and WeChat Pay are contributing to 94 percent of the yuan market. China is turning into to cashless society with its first-generation digital payment methods introduced by Alipay and WeChat pay. These simple payment methods are evolving as the customers are attracted towards loans, investments, and assets management.
China’s central bank has cast a light on the rising concern about the competition between digital yuan and Alipay and WeChat Pay. And interpreted that there is no direct competition between the two, people will be able to use these both as there are both of different dimensions. Digital yuan will serve as the money in the wallets, whereas Alipay and WeChat Pay are the wallets for your currency.
While unveiling its yearly plans, China’s Blockchain Service Network (BSN) stated that within the period of five years, they intend to build a UDPN- Universal Digital Payment Method. The former governor of the People’s Bank of China said that DCEP has 2 tier operating system in a recent event. In the first one, commercials banks will convert some of their currency into digital currency. Secondly, this digital currency will be distributed to consumers.
Li Lihui said at the Financial Annual Conference that it depends on the market choice to make DCEP a global digital currency or a replacement of Alipay or WeChat Pay.