Ant Group and Tencent work with China's central bank to push forward digital yuan
Published: Apr 26, 2021 12:35 AM
Photo: Yang Hui/GT

Some Shanghai shopping malls and vending machines in subway stations are allowing customers to purchase products using digital yuan. Photo: Yang Hui/GT

Chinese fintech giants, Ant Group and Tencent, both announced further cooperation with China's central bank to move forward with the country's digital yuan on Sunday, vowing to provide active support to the roll out of the country's digital currency. 

The Digital Currency Research Institute of the People's Bank of China (PBC) announced during the Fourth Digital China Summit, held in East China's Fujian Province, the signing of a technical strategic cooperation agreement with Ant Group to move forward with the building of a technical platform for the digital yuan, the Chinese digital currency that has been under rapid development and trials. 

The two sides will jointly promote the development of the digital yuan based on Ant Group's database, Ocean Base, and the mobile development platform, mPaaS. 

According to Ant Group, which has been summoned by China's top financial authorities for three regulatory meetings since November, the company will support the research and development of the digital yuan and its technical platform. 

The company also said it will strengthen the communication and cooperation with the Digital Currency Research Institute and push forward the implementation of new technologies during the digital upgrading to better serve the real economy. 

On the same day, the Chinese tech giant, Tencent, also shared its experimental results of digital yuan. 

Participating in the relevant design, research, development and operational work of the digital yuan, Tencent said it has provided full support to the digital yuan pilot project. 

As the next step, Tencent said it will carry out controlled trials under the instructions of the PBC. 

Mu Changchun, director of the Digital Currency Research Institute of the PBC, said in March that digital cash for retail payments could provide a key backup for mobile payment methods such as Alipay and Tencent, Reuters reported. 

According to Mu, the digital yuan will coexist with hard currency for a long time and there will be no competition with the dual payments platforms.

"Against the backdrop of the strengthening regulation on the Chinese fintech sector, it's the best choice for Chinese internet conglomerates to cooperate with the central bank on the R&D, pilot trials and operational work of digital yuan," Wang Peng, Assistant Professor of the Gaoli Academy of the Renmin University of China, told the Global Times on Sunday.

In addition to taking part in the pilot trials, the online giants can provide better underlying data architecture, including the security and stability of system, he noted. 

Besides, the central bank could carry on more trials in wider scenarios by cooperating with online giants, Wang said, adding that this is a good way to create the habit of using digital yuan. 

"Though there is not a detailed timetable to introduce the digital currency officially to the public, the development of digital yuan remains very pragmatic with ongoing long-term research work and is now rolling out tests," Wang said, suggesting massive and wider test scenarios in China. 

Global Times