China Securities Journal reported that Zhejiang E-Commerce Bank Co., Ltd., (MYBank) backed by the Ant Group and WeBank backed by Tencent may participate in the digital currency pilot projects of six state banks. The status of the two private banks is “coming soon.”
Beyond these two private banks, most urban small and medium-sized banks in China will connect to the central bank digital currency infrastructure via City Bank Clearing Services Co., Ltd. (“City Bank Clearing”). Rural Credit Bank Clearing will provide a conduit for rural banks to access the digital currency infrastructure. The Digital Currency Research Institute of the Bank of China entered into agreements with the two intermediaries last fall.
The digital currency is issued and regulated by China’s central bank. All transactions will be completely under China’s central bank’s supervision. In contrast, transactions through Alibaba Group’s Alipay and Tencent’s WeChat Pay are electronic payments controlled by the companies.
Source: The Paper, February 20, 2021