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- The digital yuan has been used to transact a record $15.6B by about 100K users during the Singles Day promotional event by Chinese e-commerce giant JD.com.
- China’s CBDC is the most advanced worldwide, with additional testing ongoing despite the lack of an official launch date.
Even though the Chinese digital yuan (e-CNY) is yet to be officially launched, various companies in the country have taken it up as a mode of payment. Among these firms is Chinese e-commerce giant JD.com which added the digital yuan as a payment option for the ongoing Singles Day.
The latter is a Chinese commercial holiday where single people celebrate rather than lament about being partnerless. The day is also considered the largest online shopping event in the world. And true to that, JD.com has reported a record $15.6 million in digital yuan transactions for the day. The company’s promotional event has been running since Oct. 31 to date. During this period, nearly 100,000 people used the central bank digital currency (CBDC) to shop at JD.com.
Digital Yuan testing and promotion
Notably, all who select the CBDC payment option are redirected to download its wallet, after which they receive a promotional offer of 15 e-CNY ($2.34). Initially, China’s central bank (PBoC) piloted the CBDC by permitting government agencies to travel. Soon thereafter, the initiative expanded to include major industries in various cities. Chinese central bank has now partnered with leading online and retail giants including e-commerce giants, shopping malls, and travel companies to mass test its CBDC.
From as early as 2014, when other nations barely knew the concept of CBDCs, China has been working on developing its digital yuan. The whole process lasted five years and was completed in the last quarter of 2019. Rumors have had it that an official launch of the currency is expected this year. Others even speculate a debut during the Winter Olympic Games (Feb. 4-20, 2022) in Beijing, China. The government is yet to announce a fixed schedule on the same and has only been expanding its test program. The digital yuan has now entered its second year of mass testing.
The continuous delays in launch likely are because the Chinese government wants to present a finished battle-tested product to the world. Presently, no other nation in the world has reached or neared China’s level of development with its CBDC. The pilot phases have so far processed over $5B in transactions, notes the PBoC. Reportedly, over 100 countries around the globe are making preparations for a sovereign national digital currency. However, only nations such as Russia and South Korea have completed the development phase, with pilot phases scheduled for 2022.
Despite governments’ quest into technological advancements, CBDCs have been criticized by some for being a ‘surveillance’ tool. For instance, US senators have objected to the use of the digital yuan by US Olympians during the upcoming Winter Olympics, citing privacy and security concerns. Only time will tell the masses’ general reaction to CBDCs and their features.
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