JD.com Pays Employees Salaries in Digital Yuan
China’s digital yuan project has ticked yet another box as e-commerce giant JD.com recently implemented it as a payment vehicle to pay salaries of some of its employees. The platform also revealed that it used the digital yvan to make payment for some other businesses.
This will go down as one of the tests for the proposed Central Bank Digital Currency (CBDC). Also, this is not the first time that the e-commerce platform JD.com is cooperating with the People’s Bank of China (PBoC) towards the development of the national digital currency.
A Consistent Partner
In December 2020, JD.com became the first online mall to test the proposed digital yuan. During the test, the platform’s fintech affiliate, JD Digits executed a pilot program where customers paid for certain items using the digital yuan. This was a part of the exercise that was carried out in Suzhou city, during which about 100,000 digital cash vouchers worth 20 million yuan was distributed to the city residents.
During the second test in Suzhou, JD.com also played a key role. The company funded the exercise to the tune of $4.6 million. It stuffed the “red envelopes” that were used for the lottery in an exercise that became the fifth trial for the digital yuan.
This time around, using the digital yuan to pay salaries highlights a new use case for the digital yuan project. This move comes after PBoC Deputy Governor Li Bo stated that the central bank will be looking to increase the scope of trials for the emerging currency.
As trial methods diversify, all eyes are on the Winter Olympics which is expected to take place in Beijing during the first quarter of 2022. There are expectations that athletes and other foreign visitors will be allowed to use the digital yuan to pay for goods and services.
China Gets Closer to CBDC Implementation
China’s efforts towards the achievement of the digital yuan project is well known within the digital finance ecosystem. Among all the nations that have shown interest in developing CBDCs, China stands out as a clear leader in the race to achieving that.
The country’s national bank notes that its major purpose of developing a national and government owned digital currency is to improve surveillance and maintain proper supervision of its financial sector. However, there are outside suggestions that part of the reason for creating the digital yuan is to oppose the prevalence of Bitcoin, and also to control the dollar dominance on China’s economy.
The digital yuan test is receiving huge support from JD.com. Recently, the platform also demonstrated how the digital yuan could move between organizations and networks, proving the interoperability of the development.
This is a crucial element, if the product must achieve its original purpose of serving as a national currency. It must be able to interact with the payment system of other platforms, and must also be adaptable for cross-border payments as has been tested between China and Hong Kong earlier.
China looks close to achieving the full implementation of the digital yuan after over five years of development. Among the partners that are supporting the development of this project, JD.com stands out as one of the prominent figures. Perhaps, this is a symbiotic relationship as a more effective digital payment system will go a long way in supporting the e-commerce processes of the organization.