Last week Huawei bought Xunlian Zhipay, which owns a payments license. Huawei was one of the founding partners in the development of the digital yuan, providing the cloud infrastructure for China’s central bank digital currency (CBDC). The move comes as Chinese authorities are trying to reign in the duopoly of AliPay and WeChat Pay in mobile payments. Recent draft legislation shows authorities could consider breaking up both AliPay and WeChat Pay. (We attach a copy of the draft legislation automatically translated using Google Translate).
To date, Huawei has apparently intentionally not sought to acquire a payments license. So what’s changed? Firstly, the eCNY or digital yuan is getting closer to launch. And secondly, if AliPay is broken up, this will create new opportunities.
Four months ago, the telecoms infrastructure company announced that its HuaweiMate 40 series of smartphones would support China’s central bank digital currency (CBDC). It provides a digital renminbi hardware wallet and hardware-level security.
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