JD.Com’s Singles Day boosted the use of China's Digital Yuan

JD.Com’s Singles Day boosted the use of China’s Digital Yuan. (Photo by Jade GAO / AFP)

JD.Com’s Singles Day boosted the use of China’s Digital Yuan

  • Over 100,000 customers have paid using China’s digital yuan on the JD shopping app during the Singles Day promotional period since October 31.
  • Being used for the world’s largest shopping event is another step towards a broader acceptance of China’s digital currency which has yet to be officially rolled out nationwide.
  • In the meantime, the People’s Bank of China is aiming to link the digital yuan to the country’s popular mobile payment apps.

Singles Day in China is the world’s largest annual shopping day and for the first time,  customers were allowed to make payments with China’s digital currency, the digital yuan (e-CNY). Accepted by local e-commerce giant JD.Com via its shopping app, over 100,000 customers have paid using e-CNY during the Singles Day promotional period, which first began October 31. 

Being also the first major economy to create a central bank digital currency (CBDC), China’s digital yuan has yet to be officially rolled out nationwide, but the move by JD is another step toward broader acceptance. A spokesperson for JD told Cointelegraph that they “will continue to work with related parties to explore the application”, but the value of the digital yuan processed during the promotion was not disclosed.

The acceptance of China’s digital yuan

The spokesperson also said that JD was the first Chinese e-commerce company to have accepted digital yuan back in December 2020. From Dec 11 till June 18 this year alone, a total of 450,000 customers used e-CNY for payment on the JD.com app, with total sales in digital yuan apparently netting over 100 million yuan (US$15.6 million), the spokesperson stated.

Nationwide, the People’s Bank of China (PBOC) announced last week that the use of e-CNY had jumped to 140 million personal accounts and 10 million business accounts. Mu Changchun, who heads the bank’s Digital Currency Institute, said pilot programs in more than 10 regions using the digital yuan hit 62 billion yuan (about US$9.7 billion). The volume of transactions totaled 150 million, he said.

The adoption is boosted by the central bank’s partnership with fintech and e-commerce giants like Ant Financial and JD.com to promote the use of its CBDC. For those who are in cities of the pilot projects, their e-CNY wallet is accessible via Alipay, which has more than one billion users in China. As of October, it was reported that over 123 million people in China have a “digital wallet” that can hold the CBDC, and the total transaction amount reached RMB 56 billion (US$8.77 billion).

Improving link-ups with mobile payment apps

As per Bloomberg’s report last week, PBOC Governor Yi Gang said the bank intends to upgrade the digital currency’s “interoperability with existing payment tools” and “improve the e-CNY ecosystem”. Yi also said the bank will create a management model for the e-CNY modeled after how cash and bank accounts are managed, while also improving on its privacy protections, anti-counterfeiting measures and efficiency.

Additionally, the PBOC wants to test the digital yuan’s impact on financial markets and monetary policy. So far, the digital currency has been tested out throughout the country by allowing citizens to use the e-CNY to purchase goods and services and pay for utilities and other bills.

Moving forward, China’s digital yuan will be mainly used for retail transactions within China and the PBOC is also preparing for a broader trial during the Beijing Winter Olympics in February next year, where foreign athletes could be allowed to use the virtual currency.