By Jonny Fry on The Capital
2 min video exploring how the Chinese government new digital currency is questioning WeChatPay and AliPay in order its own Digital Currency can be more widely used
The Chinese government announced its new and long-awaited Digital currency in April 2020 and recently made its intentions clear that this was to be a currency for its citizens by forming a tie-up with Didi, which had been hailed the world’s most valuable start-up at $56billion back in 2018, it is the firm that crushed Uber in China. Didi has 550 users and now accounts for over 90% of the ride-hailing market in China.
The South China Morning Post have been reporting that China is looking at a way to strengthen the digital trade ties between Hong Kong, Macau, and Shenzhen which have a combined GDP of over $800 billion p.a.
The new Digital Yuan offers the government the ability to monitor purchases made on mobile phones which account for 16% of China’s GDP. It is estimated that approximately 20% of Chinese people do not have a bank account so the new Digital Yuan can monitor these people who typically only spend cash or have relied on the highly successful AliPay and WeChatPay.
The government has now announced that it is to investigate the monopolistic powers of two of the most widely used and highly successful AliPay and WeChat Pay as they potentially represent a major threat to the mass adoption of the new Chinese digital currency.
AliPay and WeChatPay have 90% of the $17trillion mobile payments market globally so it is not hard to see why the Chinese government needs to curb these companies' market dominance if its own Digital currency is to be a widely used by Chinese citizens.
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Is the Chinese government tightening its grip on Digital Payments was originally published in The Capital on Medium, where people are continuing the conversation by highlighting and responding to this story.
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