Residents of China sent 20,000 transactions through e-commerce platform, JD.com within the first 24 hours of a trial of the country’s digital yuan in the city of Suzhou, according to the Global Times.
CNBC reported earlier this month that JD.com became the first online platform to accept the digital yuan, but it was not the only internet company. Three Chinese internet giants (ride-hailing service DiDi, food-delivery app Meituan, and video platform Bilibili) also participated in the country’s latest test.
The trial began after Suzhou’s municipal government distributed a total of 20 million yuan (worth ~$3 million) in ‘digital red packets’ through a local lottery.
The People’s Bank of China ‘Hopes to Implement the Digital Yuan Using Market-Oriented Means’.
The ‘digital red packet’ as a promotional concept seems to mirror a similar ‘red packet’ idea from WeChat.
WeChat’s Cao Yin, who serves as the Managing Director of the Shanghai-based Digital Renaissance Foundation, told the Global Times that People’s Bank of China (PBC) may have lifted the idea directly from WeChat.
According to Cao Yin, the PBC is relying on social networking to promote the digital currency and has poached talent from private digital currency and social media companies: “as far as I know, the PBC is also hiring talent from a lot of private digital currency firms and internet companies to develop the digital currency,” he said. “It hopes to implement the digital yuan using market-oriented means.”
Additionally, Cao said that the speed of implementation of China’s digital yuan so far has been “cautious,” and will likely continue to be so: the digital currency may not be used on a massive scale until around 2023.
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“In 2021, China will continue to look for more scenarios to test the digital yuan, but an extensive launch is still unlikely,” Cao told the Global Times. After all, once the currency is launched, it will be extremely difficult to retrieve it from users or forbid it in case of problems.
Suzhou Represents the Second City-Wide Trial of the Digital Yuan
It appears that there were no major problems in this weekend’s trial run in Suzhou. Citizens were encouraged to spend their digital cash during the ‘Double Twelve’ shopping festival on Saturday, similar to the ‘Double Eleven’ (Single’s Day) shopping festival on November 11th. 10,000 local brick-and-mortar shops participated in addition to JD.com.
According to JD.com, 80 percent of the digital currency transactions were completed by individuals born during the 1980s and 1990s. The first transaction on the platform, which took about 0.5 seconds to complete, was made by an individual born after 1990.
The Global Times reported that this latest promotional effort in Suzhou is considered an important step forward in China’s push to make the digital yuan popular.
The country has undertaken similar promotional efforts in the past: in October of this year, the city of Shenzhen issued 50,000 ‘digital red packets’ containing 200 yuan each during a one-week-long trial. As a result, 47,000 customers in the region spent 8.8 million digital yuan over seven days.