Now you can spend Chinese cryptocurrencies in online stores

Now you can spend Chinese cryptocurrencies in online stores

Chinese retailer JD.com has announced that it will become the first online store in the country to accept the digital yuan, the state-backed cryptocurrency that has been in development for the past few years. The adoption of the coin will go live later this month as part of a pilot program exploring central bank-sanctioned cryptocurrency facilitation. JD.com's fintech arm, JD Digits, will issue around 20 million digital yuan (€3 million) in total as part of a lottery for Suzhou city residents. Winners will receive a "red packet" via a mobile app containing 200 yuan of digital currency that can then be spent through JD.com's online shopping portal. This is not the first time China has conducted a trial of this nature. In October, 10 million digital yuan was given to Shenzhen citizens in a lottery, which could then be spent at more than 3.000 outlets in a particular area of ​​the city.

Ongoing tests

China has reportedly been working on its yuan digital currency since 2014, but little was known about the proposal until last year. Now that the tests are underway, more details about the coin are emerging. Unlike real cryptocurrencies, the best known of which is bitcoin, the digital yuan will not be based on distributed ledger blockchain technology and will stabilize in value against the yuan. China is not the only country looking to offer its own state-backed digital currency. Many central banks are exploring ways to launch their own stablecoins in a bid to avoid competition from decentralized cryptocurrencies like bitcoin, as well as private offerings like the Facebook-backed Libra project. Via Bloomberg