Tencent began working with the PBoC on CBDC technology in 2018. WeChat Pay and the PBoC’s digital yuan are expected to compete in the payment sector. While WeChat Pay and Alipay dominate the Chinese payments market, the digital yuan only holds a small share. The PBoC asserts that the digital yuan and private-sector alternatives like WeChat Pay will complement each other. WeChat Pay integrated electronic payments-CBDC interoperability options in early 2021. Tencent users can make WeChat Pay payments from the bank’s official app. Tencent updated its apps to enable e-CNY payments from various WeChat platforms.
Tencent Joins Chinese CBDC, e-CNY ‘Interoperability’ Drive
Tencent will be among the first Chinese private-sector firms to participate in the mBridge project. It is likely that other Chinese tech giants may join at a later stage. The PBoC has been focusing on CBDC interoperability and cross-border digital yuan use cases. The bank updated its app to enable overseas visitors to open digital yuan wallets on their mobile devices. This coincides with the Asian Games, which serves as a major international platform for the digital yuan. The PBoC is also conducting cross-border trials with Hong Kong and Macau, while Russian politicians have proposed compatibility between the digital ruble and the PBoC’s digital yuan. Tencent will use the CBDC bridge to enhance its cross-border payment service capabilities and explore multi-currency fund management options for small and medium-sized enterprises. The BIS is collaborating with central banks and financial firms on CBDC interoperability solutions.