Two of China’s internet giants, JD.com and Ant Group, are supporting the development of China’s central bank digital currency (CBDC) by running large-scale tests — including paying employees in digital yuan and providing technical support with a decentralized database.
News of JD.com and Ant Group’s deep involvement in developing and supporting the digital yuan was recently disclosed over the weekend at the Digital China Summit in Fuzhou, Fujian province.
The 4th Digital China Summit is a nation-backed meeting hosted by the Ministry of Industry and Information Technology (MIIT), the Cyberspace Administration of China and the National Development and Reform Commission, with over a hundred companies and governmental departments attending and showing their recent achievements related to China’s digital development.
“This collaboration/partnership between the government and the private sector is what I would expect to be the norm going forward,” Alex Tapscott, co-founder of the think tank Blockchain Research Institute, told Forkast.News. Tapscott pointed out that governments marshaling the capacity of the private sector for a big initiative is now a worldwide trend, and both sectors could gain benefits through such collaboration.
Ant Group provides technical support to DCEP
Ant Group, a subsidiary of Alibaba, which owns Alipay, one of China’s most famous mobile payment apps, will be providing technical support to DCEP (Digital Currency Electronic Payment) project, which has since been officially renamed e-CNY.
OceanBase, Antgroup’s independently researched and developed decentralized database and mPaaS, a mobile development platform originated from Alipay’s core infrastructure technology, will support DCEP’s technical growth, as reported by 21Finance, an elite financial newspaper in China.
“As one of the participants in the trial of the e-CNY, Ant Group’s associate MYbank will steadily advance the trial pursuant to the overall arrangement of the People’s Bank of China. Ant Group, together with MYbank, will also continue to support the research, development and trial of PBOC’s e-CNY,” an Ant Group spokesperson told Forkast.News.
MYbank is an online bank backed by Ant Group, which announced its participation in China’s digital yuan pilot trial in February.
JD.com pays employees in digital yuan
JD.com, also known as Jingdong, disclosed details of its cooperation with PBOC at the Digital China Summit. Headquartered in Beijing, JD.com is one of China’s biggest e-commerce retailers alongside Alibaba’s Taobao.
Starting in January, JD Group began offering an e-RMB salary option to some of its employees in five Chinese cities: Shanghai, Shenzhen, Chengdu, Changsha and Xi ‘an. Employees can deposit their digital RMB salary as RMB into their personal bank cards, or use it as digital RMB offline in applicable scenarios in pilot cities, as reported by The Paper, a digital newspaper run by the Shanghai United Media Group.
Previous JD.com participation in DCEP trials
This isn’t the first time JD.com has participated in DCEPs’ digital yuan trials. In December 2020, a digital yuan airdrop was undertaken, sending “digital red packets” of digital yuan to 100,000 residents of Suzhou. It was the first time DCEP had expanded its horizons beyond consumer testing in brick-and-mortar stores and restaurants to purely online uses, and JD.com was the only designated online shop for testing the applications. The testing also recently expanded to Beijing and Chengdu.
Digital transformation of China is a core goal in China’s 14th five-year plan, a guiding document for the country’s future social development and economic growth, in which a whole chapter is dedicated to discussing digital transformation in every sector of Chinese society ranging from industry to governmental administration.
China is expected to invest more in technological research and development, including blockchain, with municipal and provincial governments following the national playbook and customizing it for their own local five-year plans. Part of the plan calls for a thriving Chinese internet and strong technological foundation for companies.
“It’s good for the shareholders to stay on the right side of the government. It’s good for the government to ensure that companies continue to thrive and operate so long as they can have control over the rules of the game and can have oversight into their activities,” said Tapscott.