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Home » News » Beijing is launching its government-run payment solution

Beijing is launching its government-run payment solution

The communist party is trying to break the Alipay-Wechat duopoly.

Jackson Chen (J_C)October 5, 2026



Last year, massive rifts emerged in Jack Ma's sprawling internet and cellphone empire after Chinese authorities foiled the Ant Group's highly anticipated $ 37 billion initial public offering. Jack Ma is the founder and former CEO of Alibaba Group Holding Ltd. (NYSE: BABA), which formerly owned the Ant Group when it was known as Ant Financial and Alipay. Investors expected Alibaba to pay a heavy price, especially after Ma's outburst of criticism of the way China's state-run banks operate. As it turned out, they were right: Chinese regulators fined Alibaba $ 2.75 billion for antitrust violations - a record for a Chinese company. Beijing charged Alibaba with antimonopoly violations for abusing its dominant position. The state authority for market regulation (SAMR) found that Alibaba had abused its market dominance since 2015 by banning its merchants from using other online e-commerce platforms. But observers who believed the authorities had been completely appeased have clearly underestimated the government's anger: Beijing is now promoting a digital currency that is clearly intended to undercut the dominance of Alipay and WeChat, the country's leading digital payment platforms. "People will see that digital yuan payments are so convenient that I no longer have to rely on Alipay or WeChat Pay," a bank official involved in the launch of the e-CNY told Reuters on condition that it was Anonymity. Alipay and WeChat Pay together control 94% of China's online payments market. No fewer than six major state banks have been quietly promoting the digital yuan, or e-CNY, a state-sponsored digital currency primarily intended for domestic use, designed to replace coins and cash in circulation. Apparently, the People's Bank of China (PBOC) has been working on e-CNY since 2014. The PBOC has conducted a number of trials with the digital yuan in major cities in China, although it is still pending national adoption. The pilot projects are carried out in the form of lotteries, in which the PBOC distributes "red envelopes" with free digital cash or discounts to online shoppers in the run-up to a shopping festival on May 5th. Interestingly, the digital wallets can be linked to a dozen popular apps like JD.com, Meituan, Didi and Bilibili, but noticeably not to Alipay or WeChat. In other words, none of the participating banks can transfer digital yuan between their digital wallets and Alipay or WeChat. Beijing doesn't like the fact that WeChat Pay and Alipay happen to have an ocean of data, which probably makes sense when you consider that big data is wealth and whoever owns data is fine. China's development of a sovereign digital currency is way ahead of similar initiatives in other major economies and is part of President Xi's crackdown on antitrust practices in China's business community. Over the past decade, Ant Group has grown into a one-stop shop for everything from online payments and financial investments to offering credit and numerous other financial services, and has become the most powerful fintech in the world with over 700 million monthly users . Jack Ma founded Alipay, a subsidiary of Ant Financial, in 2004 to provide Chinese customers who did not have credit and debit cards with an easy way to shop on the vast online marketplace. The platform has grown steadily and today has 1.3 billion users. Ant Financial's dual listing on the Hong Kong and Shanghai stock exchanges was expected to raise at least $ 35 billion. As Alipay grew, Jack Ma discovered that the banks were not doing nearly enough to support small businesses and began promoting them with small loans. In 2010, Alipay was spun off from Alibaba after authorities stated that the platform needed a new license to operate. Until 2013, Alipay held billions of dollars worth of customer funds in escrow. It was around this time that the company came up with the idea of ​​investing unused customer funds in money market funds in order to generate an income. The money market fund, known as Yu'e Bao for "leftover treasure," allows customers to invest from as little as 0.01 yuan ($ 0.0015). The fund pays interest rates several points higher than what banks pay on short-term deposits.

ChinaAlibabaJack Ma





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