From Bloomberg, July 15:
China’s central bank is planning to test its digital currency on
platforms operated by Meituan Dianping, enlisting the food delivery
giant backed by Tencent Holdings Ltd. in a major step toward the token’s
mass adoption.
Meituan
has been in talks with a research wing of the People’s Bank of China on
real-world uses for the virtual legal tender dubbed Digital Currency
Electronic Payment or DCEP, according to people with direct knowledge of
the matter. The specifics of the partnership have yet to be finalized,
they added, asking not to be identified revealing private discussions.
Meituan
joins ride-hailing startup Didi Chuxing in exploring applications for a
digital yuan, which lives on a mobile wallet application and offers
Beijing greater control of the country’s financial system. Like Didi,
Meituan hosts billions of dollars in daily transactions in realms from
meal delivery to online travel services, and its participation would
drive mass acceptance and widen Beijing’s global lead in
government-backed virtual currencies. The central bank research wing is
also in discussions on trials with Bilibili Inc., another Tencent-backed
company that streams video, one of the people said.
Meituan,
which was trading in negative territory in Hong Kong around 11:30 am,
spiked after the news and closed 1.8% higher. The PBOC had no immediate
comment when contacted. Meituan declined to comment, while
representatives for Bilibili didn’t respond to a request for comment.
The
duo -- which offer a slew of online services from food delivery to
e-commerce and video games -- currently employ payment systems from
Tencent and Alibaba Group Holding Ltd.-affiliate Ant Group and would
appear to be good candidates to help DCEP carve out a share of the
country’s $27 trillion payments industry. A virtual yuan could bolster
the government’s grip over the world’s No. 2 economy and its giant
financial services industry, and some observers think it could someday
shift the global balance of a U.S.-dollar-centric global currency
system.
Virtual
cash would be quicker and easier to use than the paper kind -- and
would also offer China’s authorities a degree of control never possible
with physical money. The rise of independent cryptocurrencies such as
Bitcoin and Ether, meanwhile, have created the danger that a huge swath
of economic activity will occur out of the view of policymakers....
