According to recent reports from Chinese media, Tencent, the tech giant behind WeChat, is set to deploy digital renminbi (e-CNY) smart contracts for small and medium-sized enterprises (SMEs).
This move comes a few weeks after Tencent announced its participation in a pilot program for e-CNY global central bank digital currency (CBDC) led by the central bank.
As per Tencent’s announcement, the company will launch a “digital renminbi smart contract corporate credit solution” tailored to “small and micro-enterprise clients.”
This project is a collaborative effort between Tencent’s online payment branch, Tenpay, and WeBank, the online banking branch of the conglomerate. The solution has been customized and developed specifically for WeBank’s small and medium-sized enterprise clients.
Tencent claims that using smart contracts means that loan-related records are “tamper-proof,” which will help “prevent funds from flowing into areas like gambling, real estate speculation, and stock market trading.”
“Banks will be able to use this solution to enhance ‘security and compliance’ through e-CNY smart contracts.”
Banks assert that they can use this technology to ensure that funds are not misappropriated or used for money laundering activities or in violation of the terms of issuance.
They claim that utilizing e-CNY allows them to reduce the cost of “loan supervision” and provide faster loans to customers.
Currently, the People’s Bank of China and its partner banks have been actively pushing for the adoption of e-CNY smart contracts in recent months, aligning with global trends in green finance.