eCommerce Site Now Takes Digital Yuan

eCommerce Site Now Takes Digital Yuan

Some Chinese shoppers visiting an established online mall will be able to buy goods with the country’s first official digital currency under a new trial announced over the weekend, Reuters and other wire services reported.

Residents of Suzhou were given free digital yuan as part of a test orchestrated by China’s central bank, according to reports, and retailer JD Digits announced it will accept the currency for some purchases. JD Digits is a digital arm of eCommerce heavyweight JD.Com Inc.

Suzhou is about 70 miles, or 112 kilometers, from Shanghai.

Bloomberg reported that the 100,000 digital currency vouchers are valued at about 20 million yuan. As of the exchange rate on Sunday (Dec. 6), the value would be roughly $3 million.

In a prior test of the central bank-developed digital currency, the government gave free digital yuan valued at about $1.5 million residents of Shenzhen in Southern China.

Reuters quoted an official with China’s central bank as having said last month that the currency had been used in 4 million transactions totaling 2 billion yuan (about $300 million).

The official, Gang Yi, reportedly said FinTech companies are better positioned than traditional banks to advance developments related to digital national currencies.

The digital yuan is not a cryptocurrency, but a digital version of the official yuan. Central banks of major economies around the world, including the Federal Reserve System in the United States, are working on similar projects and collaborating on ways to facilitate transactions in official digital currencies.

Bloomberg described as the second-largest online retailer in China.

While Chinese central bankers have said retail operations offer good opportunities to test digital currencies, they also have used food establishments. Among participants in a trial announced earlier this year were: McDonald’sStarbucks and Subway.

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