China’s central bank digital currency (CBDC) is reportedly functioning as a backup for high-profile retail payment entities, such as AliPay and WeChat Pay, as part of its primary goal. 

Specifically, Mu Changchun, head of the People’s Bank of China’s digital currency research institute, reportedly remarked that China’s digital yuan is a compulsory element to maintain financial stability, in the event of “something happening” to AliPay or WeChat Pay. 

During his speech at an online panel discussion, Mu reportedly claimed that Alibaba’s Alipay and Tencent’s WeChat Pay take up a proportion of 98% of the China-based mobile payment scene – which any negative occurrences can leave devastating effects should it happen.  

“If something happens to them, financially or technically, that would definitely bring a negative impact to the financial stability of China. In order to provide a backup for the retail payment system, the central bank has to step up and provide a central bank digital currency service,” Mu further explained. 

Mu’ most recent comment reportedly surfaced during an authority crackdown on monopolistic practices by the local private sector, as Ant Group and Tencent are the dominating forces of the country’s crypto payment market.

In March this year, Tencent reportedly received a fine from China’s antitrust regulator regarding its failure of revealing their acquisitions to the state. Before the incident, the China government red-flagged a $37 billion initial public offering conducted by Ant Group. 

During the online panel, Mu reportedly further called for central banks throughout the world to work together to make sure the compatibility of national digital currencies with one another.