June 18, 2024

Demand for shares of Chinese fintech companies is growing in anticipation of the launch of the national digital currency

Demand for shares of Chinese fintech companies is growing in anticipation of the launch of the national digital currency

Share prices of Chinese fintech companies have seen significant gains as the country prepares to launchdigital yuan, which should create increased demand for security and settlement services.

According to a Reuters article, the CSI (China Securities Index Co.) index grew by more than 50% in 2019.

In turn, the shares of the Beijing Centercertification, an electronic authentication service provider, reached a record high of + 200% per year. While the shares of China's leading Internet security service provider, 360 Security Technology Inc, have grown more than half.

Last month, Mu Changchun, deputy director of the payments department of the People’s Bank of China (PBoC), said the country's digital currency was “ready” after five years of research and development.

Note that the future digital currency will be similar to the Libra stable coin proposed by Facebook and can be used on leading payment platforms such as WeChat and Alipay.

We believe that the People's Bank of China is likely towill continue to use the current infrastructure of commercial banks, while the most important carrier of personal digital currency will be mobile phones, – says a Reuters article.