SOURCE / ECONOMY
Alipay becomes available in China's digital yuan wallet, 7th commercial bank participating in digital currency's trial run
Published: May 10, 2021 11:33 AM
Residents who received red packets of digital yuan use the money in stores in Shenzhen, Guangdong Province. Photo: Li Hao/GT

Residents who received "red packets" of digital yuan use the money in stores in Shenzhen, Guangdong Province. Photo: Li Hao/GT



MYbank, backed by Alibaba's Ant Group, has been officially included and activated in the digital yuan wallet in recent days, the Global Times learned, making it the first internet bank and the seventh commercial bank to participate in the trial run of the Chinese central bank-backed digital currency.

The inclusion of MYbank will help Chinese regulators test the supervisory system for the digital yuan and track capital flows to prevent systemic financial risks, analysts said. It is the first step in China's heightened scrutiny of fintech companies. 

The digital yuan wallet app was updated over the weekend, and MYbank (Alipay) - already among the operators of the wallet - became an option through the update.

Another internet-based bank, WeBank, which is also an operator of the wallet, has not been activated yet.

According to media reports, some Alipay users were able to view a digital yuan column, which was added to the main menu of the app. 

Before MYbank, the six commercial banks running the pilot test program were all big financial institutions, such as Industrial and Commercial Bank of China, Agricultural Bank of China, Bank of China and China Construction Bank.

In addition to the official inclusion of MYbank, the digital yuan wallets of the six banks reportedly also support the payment function of three online platforms -- Eleme, Hema and Tmall Supermarket.

Analysts said that MYbank's inclusion shows that the digital yuan wallet has opened a payment link interface to the ecosystem of internet payment platforms, which could broaden the online application of China's digital currency in such scenarios as e-commerce, social networks and online-to-offline businesses.

"It will attract more merchants to open payment channels for the digital currency, helping leverage the digital yuan's role as an M0 currency," Wang Peng, assistant professor of the Gaoling School of Artificial Intelligence at Renmin University of China, told the Global Times on Monday. 

As China's largest third-party payment platform, Alipay's app includes more than 80 million merchants and over 2,000 financial institutions as partners. It has more than 1 billion users.

Wang predicted that the digital yuan will be tested across a wide variety of scenarios, such as in cross-border trade settlements. 

Analysts stressed that the digital yuan wallet's support for MYBank is in line with Chinese regulators' strengthened supervision of internet finance to rein in illegal activities that could disturb financial stability.

"Digital yuan could also give Chinese regulators a clear map of how capital is flowing and being used, which is conducive to avert risks and prevent the disorderly expansion of capital," Wang said, noting that there will be more data sharing among the platforms and regulators.

Ant Group said in a statement sent to the Global Times on Monday that its "associate MYbank will steadily advance the trial pursuant to the overall arrangement of the People's Bank of China."

Chinese consumers have shown a strong interest in participating in the digital currency's tests, which is in contrast to a Bloomberg report claiming that the digital yuan failed to impress early users. 

In a public test last year in Shenzhen, South China's Guangdong Province, which distributed 10 million digital yuan "red packets," 1.91 million Shenzhen residents registered for the lottery, but only 50,000 won. 


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