Ant-backed MYbank and Tencent-backed WeBank have been enlisted by China’s central bank to participate in its digital yuan trial. The trial for the Digital Currency Electronic Payment (DCEP) began last year, yet the two privately-owned banks are the first modern fintech firms to be part of it.
The digital yuan trial began in five provinces, namely Chengdu, Suzhou, Shenzhen, Xiang’an, as well as future Olympic locations, but it will also move to major cities.
According to MYbank, the company will “steadily advance the trial pursuant to the overall arrangement of the People’s Bank of China.” Chinese users who have MyBank and WeBank accounts will soon have the possibility to access them through the People’s Bank of China’s digital yuan app.
The e-wallets from the two privately-owned banks will have the same functions as the ones from the six state-owned lenders participating in the digital yuan trial. Some of these lenders are the Industrial and Commercial Bank of China, Agricultural Bank of China, and China Construction Bank.
The DCEP trial started a few months ago and was viewed by some as a government’s move to reclaim the 293 trillion yuan ($45 trillion) payments industry from private payment services, such as WeChat Pay and Tencent. Still, it looks like China will expand the DCEP’s role and will focus on making the payment networks secure for the use of the digital yuan.
According to recent reports, the city of Beijing announced that 10 million digital yuan ($1.55 million) would be issued to locals in order to provide them with the possibility to actually use the digital yuan.
Considering the rapid developments regarding the digital yuan and the steps taken to facilitate its consumption both nationally and internationally, China could become the first major economy with a functional CBDC project.