It seems that only recently Beijing initiated the rollout of its digital yuan. As Deutsche Bank predicted in January 2020, China is becoming the first nation with a central bank-controlled digital currency. Now, tech conglomerates like JD.com Inc. (Nasdaq: JD; HKEX: 9618) are helping advance its use.
The Digital China Summit took place in Fuzhou over the weekend, where some details were revealed on the e-CNY project. While the summit revolved around the growing digital economy of China, with the idea of the Digital Silk Road paying tribute to the ancient trade routes, some media called JD’s demonstration on the digital yuan “the most eye-catching.”
It could be said that the e-commerce giant has been in favor with Beijing lately. After China’s government unleashed all sorts of fines and limitations on its top rival, Alibaba Group (NYSE: BABA; HKEX: 9988), following an antitrust probe, JD was among the first to pledge to adhere to anti-monopoly rules. While JD was also fined in the December in the controversial probe viewed be some as an effort to curb the power of non-state-owned conglomerates, the punishment recieved by Alibaba was especially exemplary: Jack Ma’s behemoth had to pay a massive $2.8 billion and its fintech arm, Ant Group, was forced to divest some of its businesses.
Now, JD.com is the first online retailer accepting and promoting the use of the new digital yuan. In March, JD launched Yiqipay to simplify B2B interbank payments – and it supports digital currency payments, as reported by Ledger Insights. It also began paying some of its employees in digital yuan – in cities including Shanghai and Shenzhen, where the digital RMB is most advanced. To distribute the salaries, ICBC began to support the digital yuan.
Ledger Insights notes that Alibaba’s Ant and Tencent were involved in the early developments of digital currency, dating back to 2017-2018. The two titans operate China’s largest mobile wallet apps – Alipay and WeChat Pay, respectively – while JD’s fintech unit has lagged behind its rivals.
Following the antitrust crackdown, JD Digits may be ahead of its rivals for the first time. Although, last month, rumors surfaced that JD Digits may be halting its IPO after the Ant Group IPO flop in November.