Ant Group-backed MYbank and Tencent-backed WeBank will be the first two digital banks to join China’s central bank’s push in issuing electronic forms of its fiat currency, Bloomberg reported on Monday, echoing previous reports from Chinese media.
MYbank and WeBank’s services will be added to the People’s Bank of the digital yuan app, which already enabled six state-owned institutions—the Bank of China, China Construction Bank, Industrial and Commercial Bank of China, Agricultural Bank of China, the Bank of Communication, and Postal Savings Bank of China. Ant Group and Tencent each hold around 30% share of the two digital lenders.
As one of the parties participating in the research and development of the digital yuan, MYbank will “steadily advance the trial pursuant to the overall arrangement of the People’s Bank of China,” the company said in an emailed response to Bloomberg.
As the trial is expanding, adding the two digital banks to the list could increase the adoption and influence of the e-currency. Ant Group and Tencent, which operate Alipay and WeChat Pay respectively, own a combined market share of 94% in China’s mobile payment industry in terms of transaction volume.
The central bank has piloted the digital currency in several cities including Shenzhen, Suzhou, and Beijing, sending out around USD 6 million in lotteries.
Some voices consider the project as an effort by the authorities to gain more control on value transactions in increasingly digitalized payment networks and also as an effective means to prevent money laundering and other financial criminal activities.