(Representative image) Photograph:( Reuters )
China is also set to begin the trials of its digital currency in the city of Suzhou, which lies about 65 miles west of Shanghai
China has begun rolling out its digital yuan currency. Reported first by CNBC, e-commerce firm JD dot com had become the first online platform which accepts digital yuan.
China is also set to begin the trials of its digital currency in the city of Suzhou, which lies about 65 miles west of Shanghai.
According to JD Digits, the fintech arm of JD dot com, a total of $3 million (20 million yuan) will be released via a lottery.
According to reports, the winners would receive a “red packet” through the app containing a maximum of 200 yuan, with a hundred thousand red packets set to be distributed.
Once in circulation, those in possession on the digital yuan would be able to spend it on JD dot com’s online shopping platform.
China has given away large amounts of its currency earlier as well. In October, over 10 million yuan was handed out to citizens in Shenzhen, China’s technology hub.
The digital yuan is controlled and regulated by the People’s Bank of China, and will be known as a central bank digital currency (CBDC).
The project is referred by the central bank as the “Digital Currency Electronic Payment” or DCEP.
In August, it was revealed that four banks would conduct the roll out of Chinese digital currency. These include Bank of China, China Construction Bank, Industrial and Commercial Bank of China, and Agricultural Bank of China, and if these tests are successful, China will become world's country to have a sovereign digital currency.
China's push towards digital currency will strengthen its already dominant digital payments infrastructure, which according to The Brookings Institute, is more advanced than many of its Western counterparts.
Meanwhile, Switzerland-based Bank for International Settlements conducted a survey in 2019 that found that as many as 80 per cent of the world's central banks have shown interest in the idea of developing a sovereign digital currency.