China, the worldâ€™s most populous country, has jumped leaps and bounds in comparison to a great number of other countries when it comes to the creation of a central bank digital currency. As each day passes, Chinaâ€™s digital yuan is seemingly getting closer to large-scale adoption, as big-name corporations like the e-commerce giant JD.com, Mastercard, Ant Group, and Tencent have been bolstering the venture.
Chinaâ€™s Digital Yuan Is Seemingly Near Completion, JD.com Employees Paid in e-CNY
Chinaâ€™s central bank digital currency (CBDC) thatâ€™s being crafted by the Peopleâ€™s Bank of China (PBoC) has many names. Some are calling it the â€œe-CNY,â€ others call it the â€œdigital yuanâ€ or â€œdigital renminbi,â€ and itâ€™s also been called â€œDigital Currency Electronic Paymentâ€ (DCEP).
The country has been developing a CBDC for years now and in more recent times, the PBoC has unveiled the project via banks and businesses accepting it and giving away digital red envelopes.
At the end of March, it was announced that Chinese citizens could apply for a digital yuan wallet through six state-owned financial institutions. The PBoC is now working with the e-commerce firm JD.com and with the help of Alibaba, as some of JD.comâ€™s staff have been getting their salary in the form of the digital yuan.
Reports note that JD.com employees who are participating in the trial started the program back in January. Itâ€™s not JD.comâ€™s first test run with the CBDC either, as the company participated in airdrop promotions and Chinese citizens could use the digital currency to pay for items hosted on the online store.
Additionally, Alibaba Group has been involved as well prior to the employees getting paid with the CBDC, as the central bank has been working directly with a fintech affiliate of Alibaba Group called Ant Group.
Alibaba Group, Tencent, and Ant Group Are Some of the PBoCâ€™s Key Players
A recent voanews.com report insists that both Tencent and Ant Group have been bolstering the CBDC build for the last three years. In addition to working with Ant Group, reportedly the digital yuan leverages Antâ€™s database called â€œOcean Base.â€ Ant Group spinned off Ocean Base in June 2020, when it launched a self-developed database service and mobile development platform called mPaaS.
In March, Bitcoin.com News reported on when the head of the Peopleâ€™s Bank of China-run Digital Currency Research Institute, Ma Changchun. The PBoC official said the digital yuan wonâ€™t be fully anonymous, but may offer â€œcontrollableâ€ privacy protection. In the end, however, the Communist Party is in control, Francis Lun, CEO of Geo Securities Ltd. in Hong Kong recently explained.
â€œThe Chinese authorities are telling Ant that you should hand over your big data to the central bank,â€ Francis Lun emphasized. â€œThe data wonâ€™t remain in private hands since the Communist Party is the boss.â€
Mastercard Wants to Process Cross-border Digital Yuan Transactions
JD.com, Ant Group, and Tencent have all been key players when it comes to Chinaâ€™s CBDC, but now Mastercard wants in as well. The South China Morning Post (SCMP) has detailed that Mastercard wants a role in Chinaâ€™s CBDC by helping with cross-border transactions.
Mastercardâ€™s co-president for Asia-Pacific, Ling Hai, explained to SCMP in an interview that the payments company is waiting for regulatory approval to invoke an onshore card business with the digital yuan. Mastercard is already doing this with the central bank in the Bahamas as the Caribbean island recently issued a sovereign digital currency called the â€œsand dollar.â€
In 2020, the PBoC approved Mastercardâ€™s application to join the venture and currently, the payment company is working with Chinaâ€™s regulators to obtain a license.
â€œOnce we get the license, our priority is to help people understand that our brand is also synonymous with the domestic Chinese market,â€ Mastercardâ€™s Asia-Pacific executive Ling Hai concluded.
What do you think about Chinaâ€™s CBDC? Let us know what you think about this subject in the comments section below.
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