Spurred on by the now flailing Facebook cryptocurrency Libra, China fast-tracked development of its own form of digital money that it initially thought would compete with the social network’s but now may have vast portions of the global market to itself, particularly in Africa.
Wall Street Journal reporter Steven Russolillo produced a short 5-minute explainer video on the new Chinese digital currency that everyone in Africa would be well-advised to watch because there is a very good chance this new payment method will become integrated into the continent’s mobile ecosystem that is increasingly dominated by Chinese companies.
Chinese companies like Transsion, StarTimes, and Boomplay all have dominant market shares in their respective sectors in Africa. In some cases, particularly Transsion’s mobile phone brands, they’re effectively like Apple-style walled gardens where they can control what services and functionalities their tens of millions of users have access to. These companies were never going to allow a Facebook digital currency onto their platforms but given their close ties to the Chinese government, it’s totally feasible that they would introduce the new Chinese digital payment system. In fact, their customers may never know they’re using this new cryptocurrency when they buy apps, songs or send money to their friends.