MYBank, the online payment platform backed by Alibaba’s fintech giant Ant Group, has been officially included in the trial run of China’s central bank-backed digital currency. Chinese media reported on Monday that the Alipay app (MYBank’s digital wallet) added a feature allowing transactions in e-Yuan.
On social media, Chinese netizens discussed how the function suddenly appeared on their Alipay app. However, some users also pointed out that the button appeared but that it was, in fact, not possible to make payments. China Securities Journal reported that the functionality was still limited and that no merchants were listed yet.
Alipay is one of the country’s largest mobile payment platforms and boasts over 700 million monthly users. Its inclusion will help Chinese regulators test the supervisory system for the digital currency and track capital flows to prevent systemic financial risks, analysts said.
MyBank is the seventh commercial bank to become part of the pilot, alongside the six main government-backed banks. Central bank-backed financial institutions such as Industrial and Commercial Bank of China, Agricultural Bank of China, Bank of China, China Construction Bank, Bank of Communications, and Postal Savings Bank of China were previously included in the trial. In addition, the e-Yuan wallet is also supported on three e-commerce platforms; Eleme, Hema, and Tmall Supermarket.
According to GlobalData’s research, China’s digital currency will form an integral part of the government’s effort to assert its dominance globally and rival the US Dollar as the reserve currency. Moreover, the push towards a state-backed digital currency can be seen as an attempt by the government to take back full control over the economy and the private sector – including big tech companies.
When the digital currency was first introduced, some people speculated that it would replace existing digital payment functions like Alipay and WeChat pay. However, Chinese media argue that, with the steady progress of the pilot program, “people have found that multiple payment methods can coexist, and the e-Yuan has not changed the competitive landscape of the existing payment service market.”
GlobalData’s Technology intelligence center shows that China has one of the most well-developed mobile financial services (MFS) markets in the world, with 87% of the population active mobile device users.