First Set of Shanghai Retailers Accept Digital Yuan
Two Chinese top banks have made it possible for two local department stores and one food caterer to become Shanghai’s first retailers to accept China’s digital yuan on a limited scale over the weekend.
According to Li Wei, the Brand Director of Shanghai New World, one of the three retailers involved, the initiative became a reality after his company reached out to Bank of Communications and China Construction Bank to offer discounts on top of a sales campaign mainly for female shoppers as the world marks the International Women’s Day on Monday.
“The International Women’s Day sales promotion is a traditional event at Shanghai’s New World,” Li said of the event that made it possible for one of Shanghai’s oldest shopping malls to trial the digital currency which he describes as ‘one of the most trendy and novel things currently.’
“The highlight of today’s event is a trial of the digital currency. At today’s event, we have quite a few customers,” he added. “This time, the Bank of Communications has recruited 6,500 customers to test and China Construction Bank has recruited 2,000. The customer volume has risen dozens of times and the sales volume has also multiplied.”
The other retailers that participated in handling thousands in digital yuan transactions over the weekend are the New World Daimaru Department Store and Taikang Food Store in Huangpu District.
Though a digital legal tender that could be used without a mobile phone or an internet connection, the digital yuan has not yet officially launched. Unlike popular mobile payment platforms, it is meant to lower costs for merchants.
In what has been seen as the latest sign that Shanghai is accelerating the trial run of rolling out the digital currency in all walks of life, the latest move builds on the city’s initial testing of the digital currency electronic payment (DCEP) project in January when medical staff at the Tongren Hospital Shanghai Jiaotong University School of Medicine used it in a card form for purchases in their canteen.
“In Suzhou and Shenzhen in China, circulation of digital currency has been on a trial basis. In Shanghai, preparation for the launch of digital currency is in full swing,” Li said. “We added the clearing system for the digital currency into the previous clearing systems. We have worked to upgrade the digital payment module ahead of the trial program, and we believe it offered extra stimulus for shoppers on top of the existing sales campaign.”
The stimulus reportedly resulted in higher sales over the weekend as participating local shoppers got between CNY100 and CNY150 worth of virtual coupons from the two banks just for using the DC/EP project or for using it to make purchases of more than CNY380.
Reports say both banks are among the six state-owned – which all have their own digital wallet apps – that are strategically cooperating with the People’s Bank of China’s research on the project which has so far seen about seven trials of the project held in major cities across China since October. Others are the Industrial and Commercial Bank of China, Agricultural Bank of China, Bank of China and the Postal Savings Bank.
A total of 160 million digital yuan is expected to have been distributed by the conclusion of the trials this month.
Olusegun Ogundeji writes on tech-related issues including from the crypto/Blockchain space.
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