The application of China’s Digital Currency Electronic Payment (DC/EP), also known as digital yuan, which has already been on a fast development track since last year, is taking another critical step forward with new scenarios in the business-to-business segment and wage payments. JD.com Inc, the country’s second-largest online retailer, showed for the first time how it uses digital yuan for its payroll, as well as pilot applications and digital solutions for corporate payments for its supply chain partners, during the fourth Digital China Summit that kicked off on Sunday in Fuzhou, capital of East China’s Fujian Province.
In January, JD.com tested the use of digital yuan to pay some of its employees in cities like Shanghai, Shenzhen, South China’s Guangdong Province and Chengdu, capital of Southwest China’s Sichuan Province. Employees can deposit their digital salaries onto their personal bank cards, and can use the money in scenarios where the digital currency is accepted in pilot cities.
Peng Fei, head of the DC/EP program at JD Digits, JD.com’s fintech arm, told the Global Times that “many of our digital yuan pilot projects are at the consumer level, and now we are starting to pay attention to where the money comes from. Paying salaries is a good way to source digital yuan.” Peng said that the scenarios and applications of the digital yuan for businesses will be even more numerous in the future.
JD.com was the country’s first online platform to accept China’s digital currency, after the Suzhou municipal government in East China’s Jiangsu Province handed out 100,000 virtual red packets of 20 million yuan ($3 million) in total to local residents via a lottery, in order to encourage spending on the Double Twelve online shopping festival last year.
Apart from JD.com, leading Chinese technology companies such as Huawei and Tencent also exhibited their advances in the digital currency area during the summit, attracting many visitors who were eager to test out the new currency. Chinese fintech giants Ant Group and Tencent announced further cooperation with China’s central bank to move forward with the digital yuan on Sunday, vowing to provide active support to the rollout of the currency.
According to Ant Group, which is under strict regulatory scrutiny over some of its business practices, the company will support the research and development of the digital yuan and its technical platform, while Tencent said that it has provided full support to the digital yuan pilot project, and will carry out controlled trials under the instructions of the People’s Bank of China (PBC), the central bank.
“Currently, there’s no plan to launch the digital yuan nationwide. But the scale of the trial runs will be increased,” said PBC Deputy Governor Li Bo, at the Boao Forum for Asia held in South China’s Hainan Province on April 18. The PBC will increase the scale of the pilot projects to cover more scenarios and more cities, according to Li. For example, the trial of the digital currency at the 2022 Beijing Winter Olympics will not only be conducted among domestic users but also among international athletes.
