Six State banks of china are promoting the digital yuan and are targeting the shopping festival, which is on May 5. The main motto of introducing digital yuan is to provide an alternative to Alipay and WeChat Pay. The banks are encouraging retailers and merchants to download and use the digital wallet as they can directly receive digital yuan.
One bank official said that “People will soon realize that payments are easy and very convenient using the digital yuan.” The official is not authorized to speak and disagreed with being identified. China is trying to break the dominance of Alipay and WeChat Pay which are laid by the tech companies ANT group and Tencent, respectively. The Alibaba Group, which is controlled by Jack Ma, was recently hit with an antitrust penalty of $2.8 billion; this incident indicates that China is trying to break the duo’s dominance, i.e., ANT Group and Tencent. ANT group declined to comment on the relation of Alipay and e-CNY; ANT backed MYbank said that “we are one of the parties that are participating in Research and Development of e-CNY and will steadily advance the trial pursuant to the overall arrangement of the People’s Bank of China.”
However, in public, the People’s Bank of China (PBOC) stated that the e-CYN would not compete with the dominant duo Alipay and WeChat Pay. Another main reason for introducing the digital yuan is that ANT Group and Tencent have an ocean of data with them, and they can use it to make more wealth. The promoting banks also said that they would give discounts and cashback in the upcoming festival. Li Bo, PBOC deputy governor, said that the digital yuan will enhance the status of the yuan globally and also increase cross-border payments. China is also focusing on breaking the dominance of the dollar settlement system.