Alibaba’s Ant joins e-CNY currency trial

An Ant Group logo is pictured at the company’s headquarters, a subsidiary of Alibaba, in Hangzhou, Zhejiang Province, China, on October 29, 2020.

Aly Song | Reuters

BEIJING – Ant Group, a subsidiary of Alibaba, is one of the first large privately held companies working on China’s digital currency trials.

MYbank – an online-only bank in which Ant has a 30% stake – allows some users to link their accounts to China’s digital yuan app, the state-backed China Securities Journal said on Monday.

The new feature is available to some users through Ant’s Alipay app, another report from the Journal said. Alipay is one of the top two mobile pay apps in China where using smartphones for daily payments is the norm.

Last year, the People’s Bank of China (PBOC) distributed a multi-million dollar digital yuan through an app connected to the six major state-run banks. These tests enabled selected users to purchase products in participating brick and mortar stores and in the e-commerce app.

Ant did not confirm the exact nature of his participation in the digital currency project, but said the group, along with MYbank, will be involved in trials and research related to the digital yuan, also known as e-CNY, according to a statement.

“As one of the participants in the e-CNY study, the Ant Group’s associated MYbank will continue to advance the study under the overall agreement of the People’s Bank of China,” the company said. “Ant Group, together with MYbank, will continue to support the research, development and testing of PBOC’s e-CNY.”

MYbank said it had more than 35 million small businesses and individual customers at the end of last year, up 68% year over year.

It was not immediately clear to what extent MYbank users could carry out transactions in the digital yuan.

The news comes as Chinese authorities attempt to encourage spending through shopping festivals this month in Shanghai and other cities where state media said some merchants are accepting the digital yuan.

Reuters reported in late February that MYbank and WeBank, a Tencent-backed internet bank, had joined the central bank’s digital currency pilot.

Chinese media noted on Monday that WeBank accounts had not yet been activated for use with the Yuan digital app. A WeBank representative did not immediately respond to a request for comment.

Ant’s increased commitment to the digital yuan comes despite increased scrutiny by Chinese regulators. Authorities abruptly suspended Ant’s massive IPO in November and last month. Regulators said Ant will be restructuring as a financial holding company.

In contrast to internationally popular cryptocurrencies like Bitcoin, China’s digital currency is controlled by a single authority – the central bank.

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