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Inside China Tech: Digital yuan to bolster mobile payments in China
- The Digital Currency Electronic Payment system is managed privately by China’s central bank
- There were 801.7 million mobile payment users in the country as of June 30, up from about 765 million users in March this year
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Hello, this is Bien Perez from the South China Morning Post’s Technology desk, with a wrap of our leading stories this week.
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China, the world’s largest mobile payments market, is poised to accelerate its march to a cashless society, as the country’s central bank moves closer to launch its sovereign digital currency.
The digital yuan, technically known as the Digital Currency Electronic Payment (DCEP) system, is managed privately by the People’s Bank of China (PBOC) under a centralised system and does not use blockchain – the digital ledger technology behind cryptocurrencies like bitcoin.
The potential impact of the DCEP on mobile payments in the world’s second-largest economy emerged after an official from the PBOC recently clarified that the sovereign digital currency will not compete against WeChat Pay and Alipay, days after the central bank published a draft law that would give legal status to the DCEP.
“WeChat and Alipay are wallets, while the digital yuan is the money in the wallet,” said Mu Changchun, head of the research institute for digital currency at the PBOC.
Ant Group’s Alipay and Tencent Holdings’ WeChat Pay are China’s two leading mobile payment systems, which introduced QR code-backed payments into the daily habits of consumers. Such proximity mobile payments are now ubiquitous for purchases everywhere, from restaurants and shopping centres to convenience stores and supermarkets.
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