China’s central bank said the planned digital yuan will coexist with incumbent fintech platforms with the former acting as a backup for the latter.
Director of the People’s Bank of China’s digital currency research institute Mu Changchun said the digital currency will coexist with payment platforms like Ant Group’s Alipay or Tencent’s WeChat Pay during a panel discussion organized by the Bank for International Settlements.
According to Mu, it can act as a backup to the aforementioned duo who currently make up 98 percent of the mobile payment market, adding that the former will have superior privacy compared to the latter which shares data with vendors.
Systems Upgrade
In addition to a backup solution, Mu said the planned digital yuan is also for safeguarding monetary sovereignty, highlighting the recent threat from the rise of Bitcoin; improving payment efficiency; and promoting financial inclusion.
Mu also called on other central banks to protect their own monetary sovereignty and avoid the «dollarization» of digital currency.
