On 5th Dec, E-commerce giant JD.com became the first China’s online platform to accept digital Yuan currency.
JD Digits, the company’s fintech arm, will begin accepting digital yuan as payment for particular products on its online mall, as an experimental giveaway of the currency to citizens of Suzhou, according to a post published on the company’s WeChat account.
Twenty million yuan ($3 million) will be available to the public in a lottery, as reported by WeChat. Each Winner will receive a “red envelope” via an app containing a maximum of 200 digital yuan. A hundred thousand of these red envelopes will be distributed to the same number of consumers selected by a lottery. Consumers who get China’s CBDC can use it on JD.com’s virtual shopping platform.
China had previously handed out considerable sums in October when PBOC issued a lottery of 10 million digital yuan (US$1.5 million) to 50,000 randomly selected citizens in the southern city of Shenzhen.
Establishment of China’s Digital Yuan
China’s digital currency is one of the world’s thriving “central bank digital currency” projects, as authorities respond to threats from private currencies like bitcoin and Facebook’s Diem. The development of a digital currency began in 2014, according to the People’s Bank of China. Authorities took six years studying the project before launching pilot programs this year in Shenzhen, Suzhou, Chengdu, and Xi’an. The central bank digital currency manages and issues digital yuan. It calls its project the Digital Currency Electronic Payment or DCEP. The project’s development is guarded.
According to Fan Yifei, deputy governor of the central bank, the digital yuan integrates some blockchain technology components just like cryptos. There is a track record of all transactions, and they are traceable in a digital ledger. Central banks monitor digital currencies since they promise features such as more efficient cross-border payments and replacing some of the cash already in circulation.
According to BIS, 80% of the world’s central banks have begun to conceptualize and research the potential for CBDCs.
Dominating Digital Currency
The digital yuan pilot program has been advancing well, with over four million transactions totaling two billion yuan ($299 million) spent already, according to Yi Gang, governor of the People’s Bank of China (PBOC).
China hopes their digital currency will smash the US dollar’s stranglehold on the global financial system and attain control over how people spend their money.