Food delivery giant Meituan Dianping and video streaming platform Bilibili are reported to have joined ride-hailing startup Didi Chuxing in exploring the possible use of a digital currency developed by the People’s Bank of China.
People with direct knowledge of the matter told Bloomberg that Meituan has been in talks with a research wing of the People’s Bank of China on real-world uses for the Digital Currency Electronic Payment (DCEP), as the virtual legal tender is known. Bilibili too is said to be in discussions with the Bank about trials.
While no specifics of any partnerships were revealed, the involvement of such platforms – Didi and Meituan process billions of dollars in daily transactions – would help drive mass adoption of a currency format that would widen the lead Beijing already has in the area of government-backed virtual currencies.
The involvement of these platforms marks an acceleration of developments that were first noted back in April, when Beijing was reported to have begun pilots in four cities, with state-owned Chinese banks asked to carry out hypothetical-use tests of a People’s Bank of China digital currency as if it were being used in Suzhou, Xiong’an, Chengdu and Shenzhen.
These use tests included conversion between cash and digital money, account-balance check, payment and remittance. Local media also reported that some money was distributed via transport subsidies to residents in Suzhou.
Consumers already use digital payments widely – many shops no longer accept cash – having moved to mobile payments largely without the West’s intervening period of using credit and debit cards. And that means a very different mindset.
Writing for WARC, Jerry Clode, founder of The Solution, has noted how younger Chinese citizens do not see mobile payments as simply a form of transaction, but expect that payment will lead to further social, information and monetary benefits.
It is, he says, “a fundamentally different mental starting point to consumers in other markets” and one that informs attitudes to data privacy. Chinese consumers “see data as a chance to gain something, rather than a threat of losing something”.
While a virtual yuan is unlikely to be a concern for domestic consumers, Bloomberg noted that it could be a potential threat to US financial dominance.
Sourced from Bloomberg; additional content by WARC staff
