According to a report, the WeChat platform owner and the Chinese Internet giant, Tencent is looking for opportunities to explore new use cases for cryptocurrency. The company has recently released a notice inviting applications from eligible candidates, who will head the company’s new cryptocurrency research unit, a part of its payment wing.
The new team will explore options to use digital currency in its payment platform and other possible business applications. It will also consider how cryptocurrency can be utilized within the existing and any upcoming regulatory regimes.
The research team will also support the government’s initiative in the area. According to reports published by Quartz and CNBC, the People’s Bank of China considers Tencent as a prospective issuer of the digital Yuan. It is also reported that the new Tencent unit will work on developing the government’s pilot plan for digital currency in the city of Shenzhen.
There has been no response from Tencent as yet. Also, no information about the research unit has been obtained. This makes it quite unclear if the team is looking to create a new cryptocurrency or focusing on support applications for the new digital Yuan. Tencent’s WeChat Pay is one of the largest payment processing platforms in the world and constitutes 40 percent of China’s multi-trillion dollar mobile payment industry. According to a report by Business Insider, more than 900M people were using WeChat Pay as of 2017.
Being popular in China, WeChat Pay functions only in a handful of other countries. However, in a process to expand its outreach to nations contributing to the Chinese government’s belt and road initiative, the platform has suffered setbacks. The government of Nepal banned WeChat Pay and Ali Pay for not being registered with its financial regulatory authority.
According to Tencent, facebook’s cryptocurrency project Libra is a threat to the growth of WeChat Pay outside China. Some reports also mention that the Chinese government is worried about Libra becoming a private alternative to its digital Yuan project. A senior official also confirmed last week that the country is looking forward to expanding the scope of the cross-border digital payment platform.
Tencent had been taking an active interest in cryptocurrency and blockchain. It had also published a white paper back in 2017 that described a platform offering blockchain services including identity verification and digital asset management.
Fast forward to October 2019, when the company cleared its stand on starting a virtual bank that would provide financial services leveraging blockchain technology. And, the same month, WeBank, Tencent’s existing digital bank became the first technical infrastructure provider for China’s National Blockchain network.