JD kicked off the Double Twelve shopping festival on Friday evening with nearly 20,000 orders using the digital yuan, known officially as the Digital Currency Electronic Payment (DCEP), the company said in a WeChat post.
By Masha Borak
Online shoppers got their first opportunity to test out China’s new digital currency this weekend during an e-commerce festival organised by JD.com, the country’s second-largest online retailer.
JD kicked off the Double Twelve festival on Friday evening with nearly 20,000 orders using the digital yuan, known officially as the Digital Currency Electronic Payment (DCEP), the company said in a WeChat post.
The trial, the first for an online shopping platform in China, was conducted as a partnership between JD Digits, the platform’s financial arm, the People’s Bank of China and the local government of Suzhou.
“JD has over 441 million annual active users and nationwide logistics services as well as omnichannel operations, and these advantages will help promote the building of the DCEP ecosystem,” Peng Fei, head of the DCEP programme at JD Digits said in a statement.
The test is also meant to stimulate consumption and the real economy, Peng added.To lure in digital currency users, Suzhou gave away 20 million yuan (US$3 million) to residents via a lottery on Friday at the kick-off of the Double Twelve shopping festival. A total of 100,000 digital red packets were distributed, each containing 200 yuan.
Red packets are a popular way to gift money in China, and their digital version was first popularised by mobile payment platforms such as WeChat Pay and Alipay.
Suzhou residents that received the digital currency red packets were invited to download the official Digital Renminbi app, allowing them to use the digital currency on JD.com after linking it to the JD app.
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Suzhou may be the first city in China to test digital currency for online shopping, but this was just one of the several digital yuan trials China’s central bank has conducted in the past year in a bid to move the country towards a cashless society.
Unlike bitcoin and other cryptocurrencies, the DCEP is issued and backed by the country’s central bank and designed as a digital version of the yuan. Other countries have been drawing up plans for digital currencies, including most of the Group of 20 (G20) members.
The 20 million yuan distributed in Suzhou was more than double the amount given away during the first large-scale public trial of the beta version of the digital yuan, which took place in Shenzhen in October. For that trial, Shenzhen gave away 8.8 million yuan in red packets that could be spent in participating physical stores in the city.
Other pilots involving the DCEP are being held in Xiongan, Chengdu and venues for the 2022 Winter Olympics in Beijing, but the central bank has yet to provide an official timetable for the full launch of the digital yuan.
Instructions showing how to link the Digital Renminbi App storing the digital yuan with JD.com’s online shopping platform. Photo: JD.com via WeChat
JD’s data shows that first-time digital yuan users during the Double Twelve shopping festival were overwhelmingly young, with over 80 per cent born after 1980. Statistics also showed that digital currency use was slightly skewed towards men, who accounted for 57.6 per cent of the purchases. The largest single online payment amount exceeded 10,000 yuan.
The Suzhou trial was the first time selected digital currency users were invited to try out what the central bank called “dual offline wallets”, which allowed them to pay for goods in local shops without having to be connected to the internet.
Aside from JD’s e-commerce platform, residents are also allowed to use the digital yuan at JD’s offline stores as well as stores outside JD’s ecosystem. Some 10,000 shops are participating in the trial, which ends on December 27.
Originally published at South China morning post