China’s answer to Facebook’s Libra digital currency could help the central bank attract business away from Alipay and WeChat Pay.

Speaking to mainstream media outlet the South China Morning Post (SCMP) on Aug. 19, Cindy Wang, an analyst at DBS Group Research, said Beijing could profit from the appeal of its state-issued digital currency to merchants.

 

Bringing back bank deposits

According to Wang, the two payment giants Alipay and WeChat Pay account for nine out of every ten transactions in China. 

In addition, the digital currency could help limit capital outflows.

“Currently, banks are under pressure to retain their deposit base because, with the money market funds distributed by third-party payment providers like Alipay or Tencent, some of the idle money held in mobile payment accounts are leaked out of the banking system into the hands of fund managers,” she told the SCMP.

 

China’s central bank digital currency won’t compete with yuan

As Cointelegraph reported, China’s hurried digital token is reportedly ready for issuance, though it can’t be called a bonafide cryptocurrency. Under the auspices of its central bank, the People’s Bank of China (PBoC), preparations accelerated in the wake of Libra, which authorities identified as potential threat.

Revealing further details last week, Mu Changchun, PBoC deputy director, underscored the payment method would not seek to compete with the yuan, nor take over any of its existing functions.

“It can use existing resources to support and develop commercial banks and smoothly promote digital currency,” he said regarding its emission.

Cryptos feed

Latest Crypto News & Analysis

Editors’ Picks

Bitcoin attempts a dead cat bounce amid a descending channel

Bitcoin (BTC/USD), the most dominantly traded cryptocurrency, is seen attempting minor recoveries on the 9900 handle, having extended the recent declines to 9,850.65, in the wake of a symmetrical triangle breakdown on the hourly sticks seen on Saturday.

More Bitcoin News

Top 3 Coins' Price Prediction: Bearish bias intact despite tepid recovery attempts

The world’s no. 1 digital coin, Bitcoin, is seen driving the broader market. However, the third most traded cryptocurrency, Ripple, fails to benefit, as it continues to lose nearly 4% so far this Sunday. 

More Cryptocurrencies News

Bitcoin Cash: Choppy inside falling wedge, with limited upside

Bitcoin Cash (BCH/USD) breached Thursday’s low of 302.41 but managed to hold the 302 handle before staging a comeback.  Despite the latest recovery attempt, the price is down 3% in the last 24 hours.

More Bitcoin Cash News

IOTA technical analysis: Sell the bounce, as bears still eye 0.2550/25

IOTA (IOT/USD), the 17th largest cryptocurrency, risks further downside in the near-term amid bearish technical setups on different time frames. 

More IOTA News

BEST CRYPTO BROKERS/EXCHANGES

Bitcoin weekly forecast: Let the altcoin season begin

All major altcoins demonstrated strong growth while Bitcoin reluctantly oscillated in a tight range and stayed vulnerable to bearish sentiments. The first digital currency spends the best part of the week hovering around $10,200 level.

Read the weekly forecast

BTC

ETH

XRP