AliPay – the Chinese digital payment giant – has announced to allow some users to link their AliPay accounts with the digital yuan. AliPay is owned by Ant Group and is one of the mobile giants operating in the country – the other one being WeChatPay. Ant Group has confirmed its partifcipation in the roll out of the digital yuan with this move. Both the corporate giants have a sort of duopoly established on the mobile payment ecosystem in the country.
It had been cited that the launch of the digital yuan will pose as a threat to the dominance of the WeChat Pay and AliPay. The government had been promoting the digital yuan through every channel. Earlier, six state banks had launched a campaign of their own to promote the digital yuan urging their customers to shift to the digital yuan.
The digital yuan being the government’s digital currency has more chances of becoming widely accepted. It has been considered as much more convenient than the existing mobile payments. The pilot phases have been successfully rolled out for the digital yuan and potential can be seen. The digital yuan is also expected by many to overtake not just AliPay and WeChat Pay but also cryptocurrencies in the country.
China is the first major economy to have launched a central bank digital currency. The CBDC of the country or the digital yuan – also dubbed as e-renminbi – has been a hallmark step towards the digitization of payment systems. The move is expected to be replicated by many. The domino affect has already been started with the Bank of England recruiting for its CBDC project although the bank has not yet confirmed a CBDC. Moreover, Kazakhstan has also launched a public debate on a potential central bank digital currency.