E-commerce giant JD.com announced at a summit Sunday that it has been paying some of its employees with China’s state-backed digital currency on a trial basis.
According to a report sent to Sixth Tone, JD.com has launched pilot initiatives to pay “some staff members” in five cities where the company has offices — including Shanghai and Shenzhen, as well as Xi’an in Northwest China — in digital yuan. Whether the payments were one-time or recurring is unclear, and a JD.com spokesperson declined to give further details.
Participating employees must first download a mobile application that serves as a wallet for digital yuan. The report said those who are paid in virtual currency by JD.com can then spend it at places equipped with infrastructure for accepting it, or transfer it directly to their bank accounts. The digital yuan can also be used to purchase items on JD.com’s app.
China’s digital currency, tentatively dubbed DCEP for “digital currency electronic payment,” is backed and overseen by the central government. Similar to many cryptocurrencies such as Bitcoin, DCEP relies on blockchain technology to permanently record the details of every transaction. But unlike cryptocurrencies, the digital yuan is neither anonymous nor decentralized.
Mu Changchun, a senior official at the People’s Bank of China who oversees the flow of DCEP, said during a conference last year that the central bank would seek a balance between “controllable anonymity” and cracking down on “electronic criminal activities” such as money laundering.
China has been gradually introducing its digital currency across the country since 2019. Beginning last April, people in several places including Beijing, Suzhou, and Xiong’an New Area have been able to sign up to test out DCEP.
With two ubiquitous mobile payment platforms — Tencent-developed WeChat Pay and Alipay from Ant Group — already at their disposal, most Chinese people are very familiar with using virtual money, scanning QR codes to pay for gas or groceries instead of taking out their wallets. According to Mu, DCEP is intended to supplement but not replace digital payment platforms.
Editor: David Paulk.
(Header image: A virtual wallet app displays China’s state-backed digital currency, Shanghai, Feb. 24, 2021. People Visual)