As more Chinese companies start to experiment, the growth of the digital renminbi has intensified

Due to the global economic crisis and the impact of the coronavirus, the development of China's national cryptocurrency "Digital Currency Electronic Payment" (DCEP) has accelerated. More and more large companies are participating in the digital renminbi project and participating in the testing and implementation of these technologies, making it clear that the development work is done.

Meituan Dianping is China's largest commodity wholesale and export platform, and has become a new service provided by the People's Finance Company of China to try to keep up with the yuan project. Meituan currently sells products to around 450 million customers and around 6 million businesses.

Previously, "China Uber" Didi Chuxing with around 550 million users and Bilibili, a media streaming platform with 170 million users, also participated in the Chinese digital yuan test. Additionally, Chain Capital co-founder and co-founder Li Xiangmin told Cointelegraph that Didi would become the world's first private company to accept digital bank loans.

What does it mean for these companies to participate in digital yuan experiments?

In April of this year, the People's Finance Corporation of China began to select the first group of investors to try DCEP. According to the Cointelegraph, the list often includes retail businesses, especially food and beverage companies such as Starbucks and McDonald's.

Companies such as Didi, Bilibili and Meituan Dianping were selected because their customers spend thousands of dollars every day. Such a packaging industry can increase the popularity of the digital renminbi, making it more receptive.

According to the statistics of the two companies, the total customer base of our company is over 1 billion, not only in China, but also in Australia and some countries in South America. . If the comprehensive approach is carried out, the DCEP will be able to involve more users in the experiment, including representatives of large financial institutions. So, in due time, DCEP has the best opportunity.

In addition, the companies mentioned above will be the first to introduce these new technologies into their products, giving them a significant competitive advantage. As owners of modern high-end products, these companies will facilitate remittances more reliably, cheaper and faster.Experiments have shown that it usually takes around 45 days to complete the loan repayment cycle with the participation of buyers and sellers from banks from various countries, but with blockchain the whole process can be shorter than that. 'a day or two.

experiment completed

It is not known how long the digital yuan experience will last. However, since the large Chinese companies involved in this technology are increasing rapidly, it is no exaggeration that the first phase of testing has been completed.

According to available data, DCEP tests were conducted in four cities: Shenzhen, Suzhou, Chengdu and Xiongan. The goal is to measure reliability of reliability, security, functionality, convenience, usability and risk management. According to the president of Huobi University, Yu Jianing, this is the first time that administrators have seen the strength of the transition to financial situation.

First, four state-owned banks and several large companies such as Huawei, telecommunications giant China Telecom, China Mobile, and China Unicom have all entered the testing phase. In April this year, the Agricultural Bank of China also confirmed its participation in the pilot operation. However, Yu Jianing pointed out in an interview with Cointelegraph that the experience could take a long time. According to a new report, Didi, Meituan, Bilibili and other online companies have teamed up with some companies and banks to try DCEP. Meituan and Didi will explore digital advantages in their smart transportation. Bilibili cooperation has started. This is the stage of technological development. "

Aren't WeChat and Alipay on the list?

So far, more than 20 companies have participated in the digital yuan project. However, according to public records, Alipay and WeChat Pay are not on the joint list.

The South China Morning Post recently reported that China will announce the digital yuan to replace Alipay and WeChat Payments. Considering that payments from peer-to-peer transactions represent around 90% of the Chinese digital payments market, this is more than MasterCard and Visa combined, so he will be delighted to see if they will be able to play a role in this. the CBDC. advertising system. Often analysts' questions are whether WeChat and Alipay will become the main providers of yuan services, or whether they will compete with CBDCs.

Chu Kang, co-founder of Benrui Capital, said Beijing has no plans to replace Alipay and WeChat Pay with DCEP. Instead, the two companies are more likely to merge into DCEP, they told Cointelegraph. , entertainment, medical and health and insurance, this type of P2P electronic payment software has become an important tool in Chinese payment. competetion. "

Although 90% of non-electronic payments in China are made through digital platforms, national cryptocurrencies can now form the basis of financial services without electronic payments. .In an interview with Cointelegraph, Yu Jianing mentioned the following issues that DCEP can solve: Existing bank accounts are based on close ties, which often leads to data breaches, stand-alone, and not responding to public requests for payments anonymous. "

Yu Jianing pointed out that Chinese payment platforms such as WeChat Pay and Alipay only pay for certain exchanges, such as client-to-consumer and consumer-to-business micropayments. However, the mobile payments now available are not helping businesses pay their customers and pay for B2B payments. Users with different rules can choose between WeChat and Alipay or CBDC.Yu Jianing believes that DCEP and other payment platforms can be integrated in a short time. But in the long run, they will gradually be integrated into a single system.

As China seeks all of its financial services, Alipay and WeChat Pay may become more popular payments after DCEP begins to switch to cash. At the same time, these two platforms will become important tools for the Chinese government for a rapid transition to a cashless economy. In other cases, Alipay and WeChat Pay may track digital renminbi services.Chain Capital co-founder Li Xiangmin said, “Neither Alibaba nor Tencent will be involved in the development of DCEP, but DCEP will affect WeChat and Alipay. Going forward, Alipay and WeChat Payments will operate based on events or resources, such as Platform features such as ticket booking, hotel, and shopping. "

Considering that Alibaba, the founder of Alipay, and Tencent, the founder of WeChat, have previously worked with local governments and the midst of blockchain-related activities, he doesn't seem to care about the adoption of DCEP. FinStep Asia is a consulting company supporting the financial services industry, and CEO Musheer Ahmed said that given the size of the Chinese yuan, the two platforms will be the important basis for the adoption of the local digital yuan. High-tech financial platforms are an important part of the payments ecosystem. I hope that they will also be an integral part of the use of the local renminbi. These two companies, in particular Alibaba, will be major promoters of e-commerce in the national / digital “One Way, One Way”.

Participation will have questions

Given the youth and management of blockchain technology, it is too early to see how the partnership between government and big business will improve. It is uncertain whether the blockchain used in place of DCEP can be compared to a machine that earns millions of dollars every day.

Olinga Taeed, CEO and CEO of the China E-commerce Blockchain Commission, told Cointelegraph that many ideas have been put forward to justify the full integration of WeChat, Alipay, and DCEP. . CBDC-based pilot Meituan Dianping: “Although Alipay and WeChat Payments are moving towards blockchain-style exchanges, I don't think they are worthy of the volume of business that blockchains need. For example, the current Bitcoin per second exchange rate is estimated Although this is our market, Alipay's exchange rate is around 300,000 transactions per second, which may extend to over one million businesses per second by the end of this year.

Taeed also added that blockchain and building systems are not suitable, and third-party payment systems such as Emoney, developed by former Alipay architect Hu Yan, use the P2P system. I don't believe blockchain is a solution.