China’s social media giant Tencent is planning to set up a cryptocurrency research team in response to the country’s push for digital currency, according to an internal notice the firm circulated on December 23.

The team will be responsible for the promotions of digital currency research projects, follow up and implement the latest policies from relevant government departments, carry out research on digital currency, as well as the implementation and verification of business model innovation and application scenarios.

As per the notice, the move is a response to the country’s new policy of boosting Shenzhen’s digital currency research and mobile payment innovation, and it will act as a tactic to boost the company’s payment business.

8btc has reached out to Tencent regarding its latest development, the spokesperson did not deny the news but refused to provide more details.

Tencent’s decision to set up a cryptocurrency research team is no surprise to the crypto sector. The tech giant has in effect made an early foray into blockchain business.

As early as 2015, Tencent has started to build the research and development team in blockchain; In 2016, the company started the independent research and development of the underlying technology of blockchain; In 2017, it completed the R&D of underlying technologies, and basically completed the construction of the Tencent blockchain ecosystem platform; In October this year, Tencent officially released the 2019 Tencent Blockchain Whitepaper, which proposed the idea and thinking of industrial blockchain and showcased its practices in blockchain-powered e-invoice, bank draft, etc. At the beginning of November, Shenzhen’s tax service reported that it had issued over 10 million blockchain-based invoices supported by Tencent.

“As the dominant player in China’s social media sector, Tencent has two product ecologies -QQ and WeChat, equivalent of Facebook and Twitter. It makes sense that the company seizes the momentum to propose a global blockchain-powered digital currency mobile payment system based on its resources in social networking,” commented Liu Feng, director of blockchain technology research and application center at Shanghai University of International Business and Economics.

Tencent’s move, on one hand, could fill the gap of digital currency research and next-gen mobile payment in the social networking field; on the other hand, it is also an opportunity for China’s payment sector to go abroad. He predicted that Tencent’s participation would give a great boost to the crypto market.

However, Liu also pointed out that Tencent’s cryptocurrency research team has to face many difficulties in the meanwhile. The regulation and legislation progress involving the blockchain industry is slow for the time being, and the regulation sandbox has not yet been carried out in the pilot zone, under such a context, what the company could do in the early stage is limited to cautious R&D; for another, the blockchain technology is far from the large-scale use in the global scenarios, so the existing technical barriers need to be further broken through; finally, how to integrate blockchain with its business is another question the company has to tackle with.

Tencent is the world’s largest gaming company, one of the world’s most valuable tech companies, one of the world’s largest social media companies, and one of the world’s largest venture capital firms and investment corporations. According to the company’s 2019 Q1 financial report, there were more than 1.1 billion WeChat user accounts and over 700 million QQ users registered. 

When Facebook announced its cryptocurrency project Libra this June, its Chinese equivalent appeared unlikely to follow Facebook into the cryptocurrency space with its CEO Pony Ma saying that regulation would be the deciding factor for the success of Libra initiative.