Discover WeChat: The Game of Giant Corporations
TechnologyBit News Today2 min read
Cryptocurrencies have become a new front in a high-stakes game of influence between major corporations, and WeChat, China's dominant social media platform, is at the forefront of these developments. Several major financial institutions and corporations have announced they will stop accepting Alipay and WeChat Pay.
State-owned banks in China have joined the trend of corporations announcing their support for digital yuan and shunning digital payment and social media giants. The China Construction Bank, the Bank of China, the Industrial and Commercial Bank of China, and the Agricultural Bank of China have all announced they will accept a comparatively small amount of digital yuan. This appears to be a coordinated effort to promote the rollout of China's central bank digital currency (CBDC) in a country where digital payments are dominated by private sector digital payment giants like WeChat and Alipay. ## The Fight for Crypto Dominance
Given the rapid expansion and development within the cryptocurrency space, it is no wonder why major corporations and financial institutions are taking notice and positioning themselves to stay relevant. The monetary powers in China are particularly interested in maintaining control at a time when more and more consumers and businesses in China are investing in cryptocurrencies, making Chinese corporations and banks nervous.
This prompted the Chinese government to crack down on digital payment platforms that permitted transactions in cryptocurrency.
Now, with the rise of digital yuan, China wants to ensure that working-class people will trust their new digital currency, rather than more established private entities. State-owned banks have begun testing the use of digital yuan and have begun accepting small amounts, while Alipay and WeChat Pay have been locked out of banking apps in China that are used to verify identity in order to mitigate risks of fraud. ## The Rise of Digital Yuan
In 2021, the test programs expanded to include Suzhou, Beijing, Shanghai, and Xi'an. These programs have included the distribution of several digital yuan "red packets" to select residents.
The digital yuan is a central bank digital currency (CBDC) that is fully backed by the People's Bank of China. It is a legal tender and is expected to be widely accepted in China by the end of 2021. The digital yuan is designed to be used for daily transactions, both online and offline. ## Conclusion
The recent moves by China's state-owned banks to accept digital yuan and shun Alipay and WeChat Pay are a clear indication that the Chinese government is serious about promoting its new central bank digital currency. While it remains to be seen how successful the digital yuan will be in the long run, it is clear that the Chinese government is determined to maintain control over the country's financial system at a time when cryptocurrencies and digital payment platforms are becoming increasingly popular. The coming months will be critical as China works to expand the use of its digital currency and to ensure that the general public trusts it.
