China's digital yuan gives banks an edge in payments, says Moody's

The effort to develop a digital yuan "reflects the authorities' concerns about data concentration among technology companies", the Moody's analysts said

China’s digital yuan will help banks become more competitive in the payments sector after steadily losing out to popular technology platforms over the years, according to Moody’s Investors Service.

“We expect adoption of e-CNY to help reinforce banks’ position in the payments system because it will enhance their data collection ability and broaden their user bases,” analysts led by Zedric Cheung said in a report Thursday.

China is already a largely cashless society, thanks to huge popularity of digital payment tools operated by Tencent Holdings Ltd. and Ant Group Co. Ltd. Their dominance has led to spillover effects on banks, such as