To get digital fiat into the hands of consumers, to get a national currency firmly entrenched against the crypto upstarts who would seek to sidestep the central bankers — put the national currency directly in their wallets, so to speak.
To that end, Yahoo Finance reported Monday (April 26), some of largest tech players in China are helping give the digital yuan some traction in its early use cases — giving them the currency directly, through wage payments.
JD.com, among the largest eCommerce firms in the country, has begun paying at least some of its staff in digital yuan, a practice that has been in place since January of this year.
In terms of mechanics, the firm has partnered with the Industrial and Commercial Bank of China to deposit the digital yuan; though JD.com may be of the more visible enterprise level efforts to adopt and embrace the digital fiat.
In a blog post from JD.com, the company said that it was involved in the Digital Currency Electronic Payment (DCEP) achievements show at the fourth Digital China Summit held in Fuzhou, Fujian province this week.
“At JD’s exhibition featuring a small unmanned store, visitors are invited to enjoy an immersive and omni-channel shopping experience. Visitors who have a DC/EP account are able to purchase products at the store and make payments via DC/EP solutions,” the company said. The firm also stated that in addition to paying salaries for some employees, it “also made business-to-business payments via DC/EP to Unis Electronic Business and Chongqing Xin Ririshun Electric Sales under domestic home appliance giant Haier.”
At least part of JD.com’s attitude toward digital currency — to be used as true currency — was presaged by a December 2020 announcement that at least some Chinese shoppers would be able to buy items with digital yuan during a trial, and JD Digits (a JD.com unit) would accept the currency for some transactions. At the time, some residents of Suzhou were given free digital yuan as part of a test orchestrated by China’s central bank. Other retailers have also been accepting digital versions of the yuan in payments-related activity. Among those firms, streaming video platform Bilibii, on-demand services provider Meituan and ride-hailing app Didi have allowed the digital currency to be used.
We contend that these early efforts to get digital currency — the state-issued kind — into the hands of individuals, while giving them at least some scale when it comes to acceptance (through merchants and on platform) can help keep other crypto options, for lack of a better term, in the wings but not on the main stage (including, of course, Diem, the new incarnation of Facebook’s stablecoin).
Elsewhere, Global Times reports that Ant Group and Tencent are working more closely with China’s central bank on the digital yuan. The Digital Currency Research Institute of the People’s Bank of China is working with Ant Group to buildout “a technical platform” for the digital yuan. Tencent also said that it would be carrying out “controlled trials” under instruction of the central bank.
The effort has been years in the making — as back in 2016, the central bank had announced its intention to develop a digital currency — bringing the centralized banking system ever further into the 21st century, and deeper into individuals’ pockets and everyday life, and a growing number of use cases.
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