In a strange twist of fate, China Central Bank may be set to absorb WeChat Pay and Alipay. Cryptocurrency news today learned that Cindy Wang, an analyst working at DBS Group Research told the South China Morning Post that assimilation of WeChat Pay and Alipay was the only way forward for the China Central Bank to stay afloat. This would be a surprising move by China as the country has been a strong supporter of the ban on cryptocurrency.
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Cindy Wang went further to explain that China’s cryptocurrency asset could be the answer to taking businesses away from Alipay and WeChat Pay. This would help the flagging Central Bank of China get the needed clients to stay afloat. China had come up their digital currency in response to Facebook Libra, Facebook’s proposed digital asset. Wang believed that China would stand to gain from the current appeal of digital currency.
Earlier this year, China came out to denounce the cryptocurrency industry and Bitcoin in particular, saying that the cryptocurrency coin was a waste of money and investment. The country went further to ban the mining of Bitcoin and cryptocurrency coins in general. China hasn’t been the only country to stand against the cryptocurrency industry. The president of the United States also rose to make negative statements about the cryptocurrency market. Some analysts believe that the government’s stand on cryptocurrency led to the turbulent periods the cryptocurrency industry seems to be facing.
According to Cindy Wang, WeChat Pay and Alipay, the two payment giants in China, make up 90% of every transaction made in the country. Having the two giant payment companies under one umbrella could put a stop to the present capital outflows. Cindy Wang further elaborated that currently, the banks were under pressure to hold on to their deposit base, because some of the funds held in mobile payment accounts were leaking into the hands of fund managers. This leakage occurred due to the distribution of money market funds made by third-party payment solutions like Tencent and Alipay.
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Cryptocurrency latest updates learned that though China’s digital token was ready for circulation, the hurried token cannot be termed a cryptocurrency coin in the real sense. This is because the government of China has placed a ban on the mining and transactions of cryptocurrency coins like Bitcoin. Having a digital token that operated as a genuine cryptocurrency coin would violate that ruling.
China saw the potential threat of Facebook Libra as millions of its citizens used Facebook and could be potential clients for Libra. The People’s Bank of China hurriedly made arrangements for their digital token to serve as competition to Facebook Libra.
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Mu Changchun, the deputy director of the People’s Bank of China revealed more information about the digital token last week. He reinstated that the digital currency would in no wise replace the Yuan as the digital token would not be competing with the Yuan, neither would it take over any of the existing functions of the local currency. Mu Changchun said that the digital token would use the resources existing to help commercial banks.