JD.com, the Chinese e-commerce giant, will develop digital applications to implement the country's digital currency: the Digital Currency Electronic Payment (DCEP) or digital yuan.
In a agreement of collective cooperation, one of the largest and most popular e-commerce companies in China, JD Digital Technology, also known as JD.com or Jingdong, partnered with the Central Bank of China, People's Bank of China (PboC), to develop the digital infrastructure necessary for the implementation of the country's digital currency, the Digital Currency Electronic Payment (DCEP) or digital yuan. The partnership will be supported by the PBoC’s Digital Currency Research Institute and the two parties are expected to promote the development of digital platforms and applications for the implementation of the digital currency, as well as digital wallets supporting the use of the DCEP currency.
The products to be developed, ranging from basic mobile technology platforms to mobile technology platforms, blockchain, will integrate functionalities to provide services online and offline. The applications will also allow the consolidation and promotion of the Digital RMB, the monetary plan for the digitalization of the renminbi, the official name of the country's legal tender known as the yuan, its basic unit.
The e-commerce giant will use its services to promote the implementation of the new currency and its digital applications. The integration of JD.com into the development of the DCEP responds to the strategies of the Central Bank of China to create a digital currency that acts as cash inside and outside the country, and that is used for retail payments through mobile applications. With this innovation, China seeks to position itself as a world technological leader and the first country to issue a CBDC.
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Six years in the making of DCEP
The digital yuan project has been in development since 2014, when the Central Bank created the Digital Currency Research Institute to investigate the development of these currencies. Since then, the project has been advancing continuously to date, where several pilot tests of the digital currency and the digital wallet are already being implemented. In cities such as Shenzhen, Suzhou, Xiongan and Chengdu, payments are being made through the DCEP, in this way the entity evaluates the viability of the project and corrects the details that arise in its implementation, to then widespread its use with total security and confidence in the future.
The bank also notes that the tests implemented to date correspond to retail payments, such as small shops and establishments that process common payments.
On the other hand, although there is no definite date for the launch of this digital currency so far, it is expected to be fully available for the 2022 Winter Games, although many argue that its expansion may occur by the end of the year, since the current pandemic is increasing the need to bring this currency to market. The possibility is also supported by statements made by the Vice President of the National Council of the Social Security Fund of the PBoC, Wang Zhong Min, in June this year, where he stated that the PBoC had already finished building the architecture of its digital currency.
China's ambitions with digital currency
Through the digital yuan, China not only seeks to meet the growing needs and demands of users, who are already accustomed to living in a practically cashless society, but also seeks to consolidate and support national credit options, the traceability of operations in the markets and offer a system that guarantees anti-theft and anti-hacking protection, with almost zero transaction costs that benefit everyone.
In short, the DCEP digital currency is expected to function as digital cash within the country, and be widely used for making retail payments through mobile apps. In doing so, China would take power away from the dominance of large multinationals such as Alibaba and WebChat in the country's domestic trade.
About JD.com
It is one of the largest e-payment companies in China currently in existence, handling over 236 million active customers within its platform. JD.com is a member of the Fortune Global 500 index and offers strong competition to Tmall, a company that is part of the Alibaba Group. JD.com is headquartered in Beijing and is engaged in retail payment processing.
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