The next digital yuan will be compatible with the country’s major payment networks.
Mu Changchun, head of the Digital Currency Research Institute at the People’s Bank of China, said the central bank-backed digital yuan will be compatible with major mobile payment wallets such as WeChat Pay and Alipay.
According to a report from the South China Morning Post, Mu said at the conference that the digital yuan will not compete with WeChat Pay and Alipay:
“They don’t belong to the same dimension. WeChat and Alipay are wallets, while the digital yuan is wallet money.”
These latest announcements appear to contradict previous reports from local sources that China may launch its digital currency as an alternative to the two payment giants.
Digital Yuan is currently available to limited users through an exclusive mobile wallet app. At the conference, Mo said that a portable digital yuan wallet faces a long-standing problem of fraud, and said that there are many fake digital yuan wallets in the market.
Mo said that curbing the impact of fake wallets would only be possible if all parties involved, from the central bank to the users, took precautions.
In another post, Mo said the digital yuan operates in a centralized infrastructure, separating it from private currencies such as Libra and Bitcoin (BTC) on Facebook.
China quickly launched the central bank’s digital currency initiative. Last week, he published a bill providing the regulatory framework and legitimacy for his digital yuan. The central bank is currently testing its central bank digital currency across the country.
In one of the largest trial runs, local authorities distributed $ 1.5 million in digital yuan to 50,000 of the 1.9 million people who signed up for the gift.