Home » Digital Yuan, Beijing centralizes control. Ant Group will have to separate the Alipay businesses

Digital Yuan, Beijing centralizes control. Ant Group will have to separate the Alipay businesses

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Challenge to Alibaba and Tencent

But things change quickly, and not only because the Bahamas with their Sand dollar have burned the yuan on a woolen thread, arriving first at the goal. At this moment for the leaders of Beijing, digital currency is proving to be a deadly weapon to conquer the kingdom of Alibaba and Tencent which, alone, through the Alipay and WeChat Pay platforms, have the monopoly of digital payments.

In addition to the superfines of the Antitrust, there are the directives of the supervisory bodies, such as the Central Bank that yesterday imposed on Ant Group, the fintech headed by Jack Ma’s Alibaba, to terminate “improper ties” with the payment platform online Alipay. In short, the “divorce” of platforms from the traditional banking system because centralized management of digital money is on the way. Nonetheless, yesterday on the stock market Alibaba was earning around 10 percent. That is to say the move to checkmate the overly independent e-commerce giants which account for a third of China’s GDP. Alibaba & co, in fact, were forced to join the DCEP through pilot tests together with mobile phone manufacturers, including Xiaomi, at POS, ATMs.

Test in 4 cities

Localized tests have started in at least four cities, including Shenzhen and Suzhou, but now in an increasingly complicated geopolitical context – especially on the European front – Chinese tests are moving decisively to cross-border payments. A taboo has fallen. The Central Bank of China is also testing the virtual yuan beyond its borders. Hong Kong residents were allowed to use virtual currency for a whole day to make payments in nearby Shenzhen, leveraging the typical characteristics of Free trade zones.

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After all, it is understandable, the internationalization of the renminbi in a classical form marks the step, but Beijing does not give up and wants to continue to make it the main instrument to support trade.

Key role of the renminbi

In the midst of the pandemic, it has begun to weave the web again, especially in Asia, making sure, for example, that the renminbi can play a key role in that safety net, the regional financial safety net of 240 billion dollars that has just come into operation. marking a fundamental step towards the financial self-sufficiency of participating countries that use local currencies by easing their dependence on the US dollar. China, Japan, South Korea and the ten ASEAN countries, last year updated the CMIM (Chiang Mai Initiative Multilateralization) agreement: from now on, local currencies join the dollar in case of urgent financing and, moreover , with a higher roof. A good 192 billion is attributable to China, Japan, South Korea; 48 to the ASEAN countries.

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