China digital currency: fintech giant Ant Group reveals partnership history with People’s Bank of China

This is the first time that Ant Group has disclosed a detailed timeline of its work on China’s digital currency
Both Ant Group and Tencent Holdings were showing off their involvement in the digital yuan roll-out at an industry event over the weekend

China digital currency

Coco Fengin Beijing

Published: 2:09pm, 26 Apr 2021

Why you can trust SCMP

Ant Group, which was ordered by the People’s Bank of China (PBOC) to restructure its operations, has been working with the country’s central bank on the nation’s sovereign digital currency since 2017, according to information disclosed over the weekend.

At the Digital China Summit, an annual trade fair in the city of Fuzhou in southeastern Fujian province, both Ant and Tencent Holdings showed off through prominent posters at the event their history of cooperation with the PBOC on the digital yuan.

This is the first time that Ant, which called off its mega initial public offering in Hong Kong and Shanghai late last year, has disclosed a detailed timeline of its work on China’s digital currency. Ant is an affiliate of Alibaba Group Holding, which owns the South China Morning Post.

Ant was invited to join the research and development of the digital yuan in late 2017, according to its poster. It also showed that MYbank, an Ant-backed online bank, became one of the operational institutions to offer the digital yuan.

The People’s Bank of China has ordered Ant Group to restructure into a financial holding company. Photo: Bloomberg

In June 2019, China’s digital currency institute began to use Ant’s mobile app development platform mPaaS (mobile platform-as-a-service) to develop its app.

Ant officially tested China’s digital yuan in July 2020. By November 2020, the fintech company had deepened cooperation with the central bank’s digital currency institute over many projects, including OceanBase database.

In December 2020, Ant launched a digital yuan trial in Shanghai, according to the company’s poster. It also showed that Ant started to roll out the digital yuan in different parts of the country for a variety of industries at the start of this year.

“Ant Group, together with MYbank, will continue to support the research, development and trial of PBOC’s e-CNY,” an Ant representative said on Monday.

The logo of Ant Group-backed MYbank is seen at the online bank’s headquarters in Hangzhou, Zhejiang province, on January 24, 2018. Photo: Reuters

Meanwhile, a MYbank representative said that the firm “will steadily advance the trial pursuant to the overall arrangement of the People’s Bank of China”.

Tencent’s posters at the event showed that the video games and social media giant was involved in digital currency tests from February 2018. By November that year, the Shenzhen-based company had formed a team of experts to help with system development.

02:40

How mobile payments impact people’s lives in China

A company representative said that “Tencent has been taking part in the PBOC’s e-CNY project from the start, and will continue to carry out pilot trials in accordance with the guidance of the PBOC”.

Telecommunications equipment giant Huawei Technologies Co said in a statement that it has been involved with the digital yuan since November 2019. It has helped work on technical standards, and last year its Mate 40 model became the first smartphone to feature a hardware-powered wallet for China’s digital currency.

Alibaba rival JD.com said in a blog that its partnership with the PBOC started in September 2020. In January this year, it used the digital yuan to disburse the salaries of some of its employees. It has also provided technology and service support for trial programmes in Suzhou, Beijing and Chengdu.

Explainer | What is China’s sovereign digital currency?

China was the first major economy to begin exploring its own digital currency in 2014.

Although it is yet to officially launch, the technology has been tested in major Chinese including Beijing, Shanghai and Shenzhen.

Li Bin, head of the Macroprudential Policy Bureau of the PBOC, said earlier this month that digital yuan trials will expand to 10 Chinese cities this year.

Additional reporting by Minghe Hu.