Yu’ebao will not be outlawed by China’s central bank

Zhou Xiaochuan, the governor of the People’s Bank of China, on Tuesday stated that China’s central bank will not outlaw Yu’ebao, Alibaba’s popular low-entry online investment product, which are seen by some as a threat to more traditional financing. Zhou stated that there are generally not yet a lot of restrictions in place in China on Internet financing, but with time these will be put in place. The financial sector, he said, does encourage technological innovation, and regulation should keep pace accordingly. The goals of reform will also be to address loopholes in current policies and remove unfair competition.

Yu’ebao, run by Tian Hong Asset Management and Alibaba’s online payments provider Alipay, reported 81 million users in February and total deposits of more than 400 billion yuan. However, its seven-day average annualized return rate dropped to 5.97% last week, down from the 6.76% peak on January 2. 

Links and sources
Xinhuanet.com (新华网): 周小川:“余额宝”肯定不会取缔