October 20, 2020

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 showed significant growth as the country prepares to launch digital renminbi, which should create an increased demand for security and settlement services.

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

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 probablywill continue to use the current infrastructure of commercial banks, while mobile phones will be the most important carrier of personal digital currency, the Reuters article says.