HONG KONG—China is calling on private-sector pioneers Ant Group Co. and Tencent Holdings Ltd. to help it develop a state-backed digital currency that threatens the pair’s highly popular payment networks.
The People’s Bank of China in recent months has accelerated the testing of its digital yuan, putting the operators of Alipay and WeChat Pay in a difficult spot: They have little choice but to take part, despite the risk of eroding the huge user bases they have grown over years. Most of China’s 1.4 billion people use at least one of the private services to make mobile payments.
Last week, in its first white paper on the subject, the PBOC said the e-CNY is being developed mainly for domestic retail payments. It said China needs payment services “that are more convenient, safe, inclusive and privacy friendly” and a payments infrastructure that is interoperable across platforms.