Chinese commerce company JD.com has said it has become the first online site to receive the country’s digital currency.
The announcement on Saturday comes as part of one of the world’s largest digital experiments in digital yuan in Suzhou, a city about 40 miles [65 km] west of Shanghai.
$3 Million Yuan Lottery Offering
A total of 20 million yuan ($ 3 million) will be prepared for the lottery, according to WeChat posted by JD Digits, JD.com’s fintech arm. Winners will receive a so-called “red package” for the app containing a total of 200 yuan of digital currency. One hundred thousand of these red packets will be distributed.
Those who receive digital yuan can use it on JD.com’s online store platform.
It is not the first time that China has exported a large amount of its digital currency. In October, a total of 10 million yuan was donated to the citizens of China’s Shenzhen tech hub by lottery.
What Is The Digital Yuan?
The digital yuan, controlled and issued by the People’s Bank of China, is what is known as the central bank digital currency (CBDC). The central bank calls its project Digital Currency Electronic Payment or DCEP, although it remains relatively undeveloped.
Central bank digital currencies are not the same as digital currencies like bitcoin, or Libra digital based on Facebook. That is because they are controlled and issued by the central bank.
Bitcoin, which recently hit a record price, is still circulating – which means it is not controlled or not provided by a single organization.
Central banks look at digital currencies because they promise features such as cross-border payments and countries that deliver poor communities.
The BIS, a group of major banks, said earlier this year that 80% of the world’s largest banks had “begun thinking and researching CBDC skills.”
China’s largest bank appears to be at the forefront of its digital financing compared to other major economies, although it has so far stopped issuing nationwide and instead focused on exploratory projects.
Shifting To Digital Currency
“We received a notice in mid-September to upgrade our point-of-sale gear to add Digital Currency Electronic Payment (DCEP) functions. We got the idea that public trials of the digital currency might land in our district, but we didn’t expect that to happen so quickly,” a vendor at a mall in Shenzhen, South China’s Guangdong Province told the Global Times on Wednesday.
In Shenzhen’s Luohu district, the Global Times found that many vendors have posted DCEP signs. More than 3,000 vendors and shopping malls in Luohu such as Walmart and retailer CR Vanguard have upgraded their POS terminals to support digital yuan payments without any minimum.
It’s all part of the first massive public test of the digital currency, backed by the People’s Bank of China, the central bank.
In a bold move to publicly test the digital unit, the local government of Shenzhen, along with the central bank, on Monday gave away 50,000 digital “red packets” each containing 200 yuan ($30).
Chinese e-commerce company JD.com has said it has become the first online platform to receive digital currency, known as digital yuan.
A total of 20 million yuan ($ 3 million) will be prepared for the lottery for Suzhou residents.
The digital yuan, controlled and issued by the People’s Bank of China, is what is known as the central digital currency bank.