Chinese payments app, Alipay, has launched a digital renminbi solution for select users, granting a slew of features.
China’s Financial Associated Press is reporting that the Alipay payments app has launched a digital renminbi payment solution, with some financial institutions also joining in. The solution has ambitions to expand further in the months to come.
Alipay tests the waters
Currently, only users on the Alipay whitelist can use the service, which creates a wallet linked to the Internet Commercial Bank. These unique wallets can be registered anonymously as well, which may surprise some, as banks are keen on implementing KYC/AML rules in the crypto space.
Transferred funds are sent to bank savings cards, of which six are currently supported; the ICBC, Agricultural Bank, Bank of China, China Construction Bank, Bank of Communications, Postal Savings Bank, and Internet Commercial Bank.
In a bid to make the process as convenient as possible, the wallet will also allow transfers by phone number and email. Each user, however, will only be allowed one wallet. The report also notes that sources have said that Tencent is working intensely on the design, research and development, and operations of the digital renminbi project.
The two-tier structure is in reference to guidelines issued by China’s central bank. The latter produces the renminbi digital currency, which is sent to banks and is then responsible for handling user transactions. The 2.5 tier structure refers to new entities that may offer “circulation services.”
China still ahead of the pack
China, which already has one of the most sophisticated digital payments ecosystems, is attempting to boost its economy with more digital improvements. The country is by far the leader in CBDC development. It has conducted several pilot programs, resulting in millions of dollars worth of transactions.
China is hoping to launch the asset by the end of the year, and other countries like the U.S. are keeping a tab on it. Despite being a major player in the CBDC space, the Bahamas and Cambodia were ranked as the top two CBDCs.
Other countries are quickly catching up though, moving from the proof-of-concept phase into research and development. This includes France, Japan, and Australia, as well as the European Union. There is still much international cooperation required, but the ball is certainly rolling.
What has become certain over the past few years is that financial institutions and authorities see the value in blockchain-based payment solutions. Whether this will coexist alongside cryptocurrencies seems to vary from country to country, but there is a demonstrable increase in the technology.
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