Chinese e-commerce giant JD.com
Suzhou residents can now makes purchases with the digital yuan, which refers to the Digital Currency Electronic Payment (DCEP), using their “dual offline wallet” which doesn’t require an internet connection to make payments in physical shops, instead of the traditional way of paying with cash or card.
Residents also have the chance to make purchases on e-commerce platform JD.com
“JD’s self-operating stores are no longer internet institutions, but rather like a physical retail organization,” said Professor Yangjun Xi, an expert in the field from Shanghai University of Finance and Economics.
The ubiquitous mobile payments including WeChat Pay and Alipay belong to the category of third-party payments, which exist between a customer and a shop owner. But the digital currency ensures the transaction happens instantaneously between the two parties.
The move came as part of the Chinese government’s digital currency trial in the city of Suzhou, Jiangsu Province, issuing 20 million digital yuan of red envelopes, a form of monetary gift, to eligible Suzhou citizens.
Each red envelope contains 200 digital yuan and a total of 100,000 envelopes will be handed out to the citizens to enjoy the Double 12 Suzhou Shopping Festival.
Chinese authorities have previously conducted similar digital yuan red envelope trials in Shenzhen, one of the nation’s financial hubs, on a smaller scale of 10 million digital yuan in October this year.
The Shenzhen trial program saw about 470,000 individuals successfully receive the virtual money, achieving over 620,000 deals with an approximate transaction amount of 8.7 million digital yuan, according to data reported by China state media Xinhua.
Two months later in Suzhou, the experiment is not only larger in terms of amount, but also involves more participating banks, online consumption scenarios, and the option for offline payments.
Postal Savings Bank of China and Bank of Communications for the first time joined the digital currency pilot program besides the Big Four, the previous participants which stands for the four main banks in China, including Bank of China (BOC), Industrial and Commercial Bank of China (ICBC), Agricultural Bank of China, and China Construction Bank.
“After the rather successful pilot in Shenzhen, it is natural to invite more banks to join and participate other than the Big Four,” Professor Xi said. “After all, the digital currency will be fully promoted and implemented in the future and there will definitely be a considerable number of banks to join the cohort.”
Additionally, the digital currency has debuted in Suzhou as part of local civil servants’ salary, state media China Central Television reported in August.