Subject: Central Bank curbs Yu'ebao alike to guard potential risks [Print This Page] Author: bluesand Time: 28-2-2014 15:27 Subject: Central Bank curbs Yu'ebao alike to guard potential risks
Since its debut in June, the rapid ascension of Yu'ebao and its potentially disruptive impact on the retail banking sector has become one of the biggest stories in China's financial services industry.As the Shanghai Securities News reported, Yu'ebao, the online investment platform operated by China's leading payment service provider Alipay and Beijing-based Tianhong Asset Management Co, had attracted more than 400 billion yuan ($65.96 billion) in deposits as of February 14.
The impact of such currency fund cause worries about the stability of the fincancial market.In time of no systematic supervision of internet finance,the People's Bank of China use four round of repurchase agreements lower than expected to keep the RMB trading price low.The effect is to lower the profit rate of internet fund.Curbing the attractiveness of yu'ebao and its alike will be a cushion for future supervision and to prevent the potential risks.
In the enthusiasm to preserve the value of their money though, many Yu'ebao customers may have lost sight of the possible investment risk they face through its products.
In fact, Yu'ebao is not the first company to offer investment products to online payment customers. US-based online payment service provider PayPal started a similar service in 1999.It starts well,however,After the crisis in 2008,annual rates had declined to an average of just 0.04 percent, a slump which did little to promote user interest in PayPal's service.