The central bank of China plans to test its electronic currency on the Meituan Dianping platform, adding the food delivery group supported by Tencent Holdings Ltd. in a significant step toward the widespread adoption of the token.
Meituan was in talks with a research arm on real-world uses by the People's Bank of China for the digital legal currency called Digital Currency Electronic Payment or DCEP, sources with knowledge of the matter, disclosed. The joint venture's details have yet to be completed, they said, requesting anonymity as the matter is private.
Based out of Beijing, Meituan Dianping currently boasts of over 435 million active users and billions of dollars worth of daily transactions. This creates a big opportunity for the mass advocacy of the virtual Chinese currency. China has been testing its centralized electronic money in four key cities and is close to issuing it to the public.
Sources also disclosed to Bloomberg that Meituan had engaged in discussions with the research division of China's central bank - the Digital Currency Research Institute - about the use-cases for its Central Bank Digital Currency. However, both sides have yet to specify the details regarding this venture.
Meituan joins ride-hailing startup Didi Chuxing in advancing the central bank's virtual currency. Like Didi, Meituan is engaged in a multi-billion dollar meal delivery and online travel services. Its participation would boost mass acceptance and broaden Beijing's global influence in central bank-supported virtual cash. The PBOC's research unit is also in talks on tests with Bilibili Inc., another Tencent-supported group engaged in video streaming, the report disclosed.
The central bank had already clarified that it does not have a specific timeline for the electronic yuan's unveiling, but the lending institution and its research uni have been ramping up efforts to study the use-cases of the CBDC in the real world.
The country's progress toward launching its own virtual money has only gained a lot of traction during the global health crisis. In June, Wang Zhongmin, former vice-chair of PBOC's National Council for Social Security Fund, announced that China had completed the backend development of the CBDC. The government had also begun drafting policies for the same in March this year.
Meituan, which was trading in the red zone in Hong Kong around 11:30 in the morning, rose following the news and settled 1.8 percent higher at the bell.
The PBOC and Meituan currently employ payment systems from Tencent and Alibaba Group Holding-subsidiary Ant Group and look poised to be strong candidates to help DCEP snag a significant share of China's $27 trillion payments industry.
