Banking News

JD.com collaborates with Chinese bank on digital yuan giveaway

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Last Friday, the Bank of Communications, China’s fifth largest state-owned bank, and the Chinese e-commerce giant JD.com jointly launched a second offering of their central bank digital currency (CBDC) giveaway to encourage people to adopt the CBDC.

Following the success of last month’s Digital RMB JD Pilot Event, this event will issue 400,000 digital yuan packages, totaling 16 million RMB ($2.5 million), to citizens of two major cities, Shanghai and Suzhou. That’s slightly less than the 500,000 packages of 20 yuan ($3.10) offered in August.

Like most of the digital renminbi giveaways conducted in the past, the format remains the same. Registered users will be automatically entered into a lottery, where winners are then randomly chosen.

Whereas local governments directly funded previous giveaways, major companies such as JD.com and Bank of Communications are now beginning to provide incentives via their own apps.

To sign up for the event, citizens will have to do so via the JD App, which they can also use to spend the money.

JD.com has prior experience with the digital yuan pilots, as it was initially the only online retail outlet supported in the first trials.

China’s short-term goals for the digital yuan are domestic, with the aim of providing an alternative to mobile payments giants Alipay and WeChat Pay. Both solutions have integrated the digital yuan, and the six big state-owned banks also provide wallet solutions.

Meanwhile, the topic of wallets has been the focus of CBDC research in other countries. Last week, the UK-company Everis began research into hardware wallets for a tokenized CBDC in conjunction with two British universities.