The Chinese tech titan Tencent, known for operating WeChat, is set to launch a digital yuan smart contract offering specifically designed for small and medium-sized enterprises (SMEs). This move comes shortly after Tencent’s announcement of its participation in a central bank-led e-CNY and global CBDC interoperability pilot. According to the Securities Times, Tencent will introduce a “digital yuan smart contract enterprise credit solution” that caters to the needs of “small and micro-enterprise customers.”
Tencent’s Tailored Solution for SMEs
The digital yuan smart contract enterprise credit solution is a collaborative effort between Tencent’s online payments arm, Tenpay, and its WeBank online banking affiliate. Tencent stated that the solution has been “customized and developed for WeBank’s SME and micro-enterprise customers.” It will enable commercial banks to accurately track the allocation of loans and other forms of funding. As a result, loan-related records cannot be forged or tampered with, preventing funds from flowing into areas such as gambling, real estate speculation, and stock market trading.
Enhanced Security and Compliance through Smart Contracts
Tencent explained that the usage of smart contracts will enhance security and compliance for banks using e-CNY smart contracts. This, in turn, may benefit customers by allowing commercial banks to offer preferential interest rates due to reduced risk levels. The adoption of e-CNY smart contracts has been actively promoted by the central People’s Bank of China and its partner banks, particularly in the realms of green financing and corporate loans. Banks believe that this technology can safeguard against fund misappropriation, greenwashing practices, and violations of issuance contracts. Additionally, adopting e-CNY smart contracts enables banks to reduce “loan monitoring” costs and provide faster loan distribution.
Tencent has revealed that its digital yuan smart contract offering will be expanded in the future. The company’s commitment to advancing digital currency utilization is further demonstrated by its participation in the creation of a specialized “digital yuan industrial park” in Shenzhen, China’s leading tech hub.
“The digital yuan smart contract enterprise credit solution is a significant step towards streamlining financial operations for SMEs. Tencent’s contribution in this field showcases its dedication to fostering financial inclusion and providing secure and efficient financial services.”
– Tencent spokesperson
