Chinese IT giant Tencent launches Digital Yuan smart contract services | Taza Khabre

Source: xy/Adobe

Chinese tech titan Tencent, the operator of WeChat, will launch a digital yuan smart contract offering for small and medium-sized enterprises (SMEs).

The move comes weeks after the company announced it would join a global CBDC and e-CNY interoperability pilot led by the central bank.

By Time of valuesTencent said it will launch a “digital yuan smart contract business credit solution” tailored for “small customers and micro-enterprises”.

The project is the brainchild of Tencent’s online payments arm Tenpay and its online banking subsidiary WeBank.

WeBank headquarters in Shenzhen, China.
WeBank headquarters. (Source: Lhzss8 (CC BY-SA 4.0))

Tencent said the solution had been “customized and developed for WeBank’s SME and micro-enterprise customers.”

And the offering will allow commercial banks to “accurately track the whereabouts” of loans and other forms of financing.

The use of smart contracts means that records related to loans “cannot be forged or tampered with,” Tencent said.

This, the company said, “will help prevent loan funds from flowing into areas such as gambling, real estate speculation and stock trading.”

Banks will be able to use the solution to increase “security and compliance” through e-CNY smart contracts, Tencent explained.

A consumer uses a digital yuan wallet to pay at a store in a video released by the Shanghai Pudong Development Bank.
A consumer uses a digital yuan wallet to pay at a store in a video distributed by the Shanghai Pudong Development Bank. (Source: yangli20067/Weibo)

And this could also help customers, the firm suggested, by allowing commercial banks to offer “preferential interest rates” (due to reduced risk levels).

The People’s Bank of China and its partner banks have been promoting the adoption of e-CNY smart contracts in recent months.

This has especially been the case in the worlds of green finance and corporate lending.

Banks say they can use the technology to ensure funds are not misappropriated, used in greenwashing units or used in a way that contravenes issuance contracts.

They claim that using e-CNY allows them to reduce “loan monitoring” costs and provide loans to their customers faster.

Tencent said its new program “will be expanded (…) in the future.”

A consumer uses the digital yuan to pay at a POS device in a store in a video distributed by the Shanghai Pudong Development Bank.

Earlier this week, a group of Chinese IT and payments companies announced that it would be moving into a new CBDC-themed “digital yuan industrial park” in Shenzhen, the country’s de facto tech capital.

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