Alipay Helps Chinese Central Bank Complete Initial Development of Statutory Digital Currency

Fintech giant Alipay is playing a key role in efforts by the Chinese central bank to develop a statutory digital currency.

Alibaba-affiliate Alipay has made public five patents in relation to China’s statutory digital currency during the period from 21 January to 17 March.

The patents involve issuance of digital currency, as well as recording of transactions, digital wallets, support for anonymous trading and the supervision and handling of illegal accounts.

Sources told Global Times that the patents indicate that the first stage of development of China’s statutory digital currency is complete.

Ac­cord­ing to a re­port from Sina from late 2019 at least 15 com­pa­nies are help­ing PBOC with the de­vel­op­ment of its statu­tory dig­i­tal cur­rency, in­clud­ing big state-owned banks, Chi­na’s big three tele­coms com­pa­nies and some of its lead­ing tech com­pa­nies. 

These com­pa­nies re­port­edly in­clude: 

• In­dus­trial and Com­mer­cial Bank of China (ICBC),
• Agri­cul­tural Bank of China (ABC), 
• Bank of China (BOC), 
• China Con­struc­tion Bank (CCB), 
• China Mo­bile, 
• China Tele­com, 
• China Uni­com, 
• Ten­cent, 
• Huawei.

Cao Yan, managing director of Digital Renaissance Foundation, said to Global Times that the Chinese central bank’s collaboration with companies such as Tencent and Alipay is of tremendous benefit to the development of a statutory digital currency given their immense technological expertise.

Cao also said that China should accelerate development of its digital currency as it will help the central bank to slash interest rates amidst emergency conditions such as the COVID-19 outbreak.

“If there is a chance China is considering lowering its interest rate into negative territory as an final option and directing such policy to commercial loans and lending, a circulated digital currency rather than M0 will be able to achieve that,” said Cao.

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