A recent article in The Financial Times has informed that People’s Bank of China has started trials of its digital currency electronic payment system (DCEP), as a part of their strategy for central bank digital currency (CBDC) in order to curb down the dominance of Alibaba and Tencent in terms of online payments made in the country.
According to the article Alipay controls more than 56% of all mobile payments made in China. Moreover, an unknown source has shared that the former governor of the central bank has given the tech giants much freedom, despite the objections of the country’s regulators.
This resulted in an expansion of the companies that have made them difficult to manage. The central bank now wants to provide commercial banks with a more equal playing field to remedy the situation.
China’s CBDC project is developing very consistently. It became known that the state-owned Agricultural Bank of China is one of the banks that conducts exploration tests on digital currencies. The bank has created an internal mobile app for a few of their employees to do trials of the potential CBDC.
The testers can use the application to pay through QR codes, do transactions and payments by touching another person’s device to their own.
Meanwhile, companies participating in the testing of the method include fast-food corporations, such as Subway, McDonalds and Starbucks, Chinese equivalent of Uber, Didi Chuxing, and e-commerce company Meituan Dianping.
