China’s Upcoming Digital Currency Will Reduce Fintech Players Dominance

China’s upcoming digital currency will reduce the dominance of the local fintech players according to the Chinese regulators so let’s find out more in our latest altcoin news today.

China’s upcoming digital currency will also usurp the US dollar and the fintech companies say they will play a huge role in the CBDC despite their comments. According to the Financial times, the Digital Yuan will cut into the bigger roles held by Tencent, Alibaba, and others that are key players in the Chinese financial economy. The people that are familiar with the ways the People’s Bank of China thinks believe that CBDC intends to simplify digital payments and inter-bank settlements int eh country while increasing domestic usage.

The private companies play a huge role in this regard as Alipay oversaw more than 55% of China’s $19 trillion mobile payments market in 2020 according to the reports. However, the digital yuan is being earmarked to change this according to one senior officer at the Hong Kong Monetary Authority:

 “They want a more level playing field for the banks. Alibaba and Tencent so dominate retail payments while banks are less active in electronic payments.”

Suppressing the local players is not all. The official said that China’s digital currency is aiming for the USD dominance on the global financial markets:

 “They will relax capital controls and internationalize gradually, so the US is not the only dominant currency. Over the past year, the PBoC has changed its tone about the local currency used within the region and about the use of yuan assets for central banks.”

In the meantime, the senior executive from Ant Finance which is the payments arm of Alibaba and the world’s most valued fintech company said his company is a  part of the discussion regarding the digital Yuan:

 “In principle, we are supportive. But digital is still a small part of the payments [industry]. The speed of growth, though, is because of what Alipay and Tencent have done.”

The reports have also said that the digital yuan will likely be available through apps such as Alipay as the company also applied for patents for technology that will help them integrate it. Digital currencies and blockchain are main features in China’s ambitious “Five-Year-Plan” that is already being tested on the Didi sharing platform.