Alibaba-backed online lender MYBank has joined the ranks of several state-owned commercial banks involved in China’s digital yuan pilot program, becoming one of the first privately owned banks to participate in a trial aimed at introducing a sovereign electronic currency system which is widely believed will revolutionize the country’s online payment industry.
Being one of the parties enlisted for the research and development of China’s digital currency, six-year-old MYBank will “steadily advance the trial pursuant to the overall arrangement of the People’s Bank of China (PBOC),” a MYBank spokesperson told Caixin on Tuesday, without elaborating on the matter.
MYBank differentiates itself from traditional commercial banks by using cloud technology to lower financing costs and fast-track the loan approval process particularly for small- and medium-sized enterprises, which have grown in recent years.
Tuesday’s confirmation comes three days after the state-backed China Securities Journal reported that Tencent-backed online lender WeBank is expected to also join the digital yuan program, which is being run under the auspices of six state-owned financial institutions including Bank of China, China Construction Bank and Agricultural Bank of China. The report, which also mentioned MYBank’s involvement, said that MYBank and WeBank’s services will soon be included in the PBOC’s digital yuan app. WeBank declined to comment on the report when contacted by Caixin on Tuesday.
Adding the two online banks to the pilot program could help the PBOC expand the influence of its planned digital yuan as Alibaba’s Alipay and Tencent’s WeChat Pay control more than 90% of China’s digital payment market. The move also comes as Beijing has tightened its oversight of the country’s major fintech firms over monopoly concerns.
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