The Director of the Digital Currency Research Institute at the People’s Bank of China, Changchun Mu, has stressed the importance of wallet providers enabling payment options for the digital yuan across all retail settings. This announcement was made during a speech at the China International Service Trade Fair, highlighting that the digital yuan has undergone substantial upgrades in terms of its structure and business model. Now, the focus is on enhancing payment tools to align with these advancements.
Mu specifically addressed major commercial banking apps like WeChat and Alipay, emphasizing their responsibility to comply with regulatory standards. The central transformational aspect is centered around retail transactions, aiming to integrate the digital yuan as the preferred payment method across various platforms and retail scenarios, with strict adherence to regulatory frameworks, necessary financial licenses, and government supervision.
In the short term, the focus is on standardizing QR codes and achieving mutual barcode recognition. Over the long term, substantial upgrades to payment tools are planned, ensuring a seamless transition while maintaining existing business and regulatory models.
The wholesale payment landscape will also witness adjustments as the central bank’s digital currency system integrates with existing interbank payment systems and commercial bank intranets supporting wholesale payments. This integration aims to prevent resource wastage and enhance operational efficiency, especially within financial market infrastructure, with the digital yuan playing a pivotal role in settlement and smart contracts facilitating processes like payment versus payment (DVP) and payment delivery (PVP).
As China continues to refine its digital currency infrastructure, wallet providers like WeChat and Alipay will play a crucial role in seamlessly integrating the digital yuan into various retail scenarios, marking a significant step toward realizing China’s vision of a digital currency-powered future.
