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China's central bank is nudging payment platforms to catch up to the digital yuan, its homegrown digital currency that's received major tech and business updates. Changchun Mu, who oversees the Digital Currency Research Institute at China's People's Bank, conveyed this message on September 3 while speaking at the annual China International Service Trade Fair.
According to Mu, the digital yuan's technological and business features have been significantly updated, and it's time for payment platforms to do the same. This involves adapting to accommodate the digital yuan in all types of consumer transactions. Payment apps like WeChat and Alipay, he said, should align their features with regulatory guidelines. For the immediate future, they should focus on incorporating QR codes compatible with the digital yuan. However, more extensive updates to payment features should follow in due course.
While much attention has been given to retail payments, Mu also touched on large-scale, or wholesale, payments. He emphasized that there's no need for a wholesale transformation of existing interbank payment systems. Rather, adding the digital yuan as a payment option to current setups would suffice. The speech did not delve into the specifics of how this integration could take place.
On a related note, China has been steadily working on enhancing its digital infrastructure, which is backed by blockchain but fully controlled by the government. Last month, authorities launched a new data exchange in Hangzhou that leverages this technology to facilitate the smoother sharing of corporate IT data.
With these advances, it's clear that China is committed to evolving its digital currency and the larger ecosystem that surrounds it. Payment platforms will need to pivot quickly to ensure they're not left behind in this transformation.
