China’s Central Bank Digital Currency Set to Make Alipay & WeChat Pay Stronger

Central bank digital currencies have taken on more importance in the last few years with China leading the way as they have been thinking about the idea for almost six years; the Digital Currency Electronic Payments (DCEP) platform will probably launch sometime in the next year and help to strengthen the country’s two largest payments companies; Alipay and WeChat pay control 90 percent of China’s digital payments market and up to 25 percent of retail spending; there is a thought that DCEP will compete against the payments giants but history tells another story; parent companies Ant Financial and Tencent have worked on many projects with the government already and this looks to be another one where the companies will help; both companies have millions of merchants outside of China which will also help the Chinese government to slowly move beyond their borders with DCEP; the government has already added a central clearing house for payments through the two companies and so trying to compete versus integrate does not make much sense; CBDC’s will continue to be a hot topic in the years to come especially with the current crisis showing the need for more digital financial services to reach as many people as possible. Forbes

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