China Announces New DCEP Pilot and Lottery in Suzhou
After conducting a hugely successful trial of its upcoming digital yuan wallet this fall, China has set its sights on more large-scale trials of the new payment system. According to a report from Asia Nikkei, the Chinese government will be expanding the trials of its DCEP payment system this week with a massive pilot project set to take place in Suzhou.
The new DCEP trial will be significantly different from the “red packet” pilot the government conducted in Luohu back in October. Namely, China wants to broaden the use of the digital yuan wallet beyond just POS terminals in physical stores and is looking to test out a feature that allows users to send money to each other by just touching their smartphones together.
Set to start on Friday this week, the trial will see around 1,000 participants try out the feature, which will be available even without an internet connection. However, 100,000 more people will participate in the pilot project in Suzhou, as the government plans on testing out the platform’s stability and resilience when handling a significant number of payments. Each of the 100,000 participants will receive 200 yuan, worth around $30 at press time, which can then be used to either buy products in various stores around Suzhou with the online e-retailer JD.com.
The e-commerce giant will become one of the first online platforms to accept the digital yuan. Huawei Technologies has also been heavily involved with the pilot, reportedly rolling out smartphones that support the tap-to-transfer feature that’s set to be introduced to the digital wallet.
China’s timing of the latest digital yuan payments shows that the country wants to test out the wallet in time for the “Double 12” shopping event, where online retailers offer huge discounts on December 12th. The fact that the day usually sees millions of orders being placed shows that the government is quite serious about making the DCEP platform highly scalable.
While this is the largest digital yuan trial in the country to date, Suzhou isn’t the only place where the government is currently testing out the new payment system. According to Asia Nikkei, tests are also moving along in other cities, including Chengdu, the Xiong’an New Area, and Hong Kong.
The People’s Bank of China (PBoC) has partnered with the Hong Kong Monetary Authority to launch a technical trial of cross-border payments using the digital yuan. Christopher Hui Ching-yu, Hong Kong’s secretary for financial services and the Treasury, said in October that the trial was set up so the city can actively respond in the event that PBoC would like to explore the use of DCEP outside of the mainland. In Chengdu, certain banks have called their customers to download a wallet app that allows them to freely convert cash into digital yuan, which can then be spent at local supermarkets or used for paying bills or other utilities. The Xiong’an New Area, a growing city in China’s northern Hebei province, has allowed customs authorities to accept security deposits in digital yuan, enabling various importers to utilize the new digital currency.