Digital yuan

Almost 20,000 digital yuan (DCEP) transactions on online retailer JD.com were made by users in the first 24 hours after an experiment began in Suzhou, the Global Times reported.

Municipal authorities handed out 100,000 "red envelopes" worth a total of 20 million yuan ($3 million) to residents through a lottery on the eve of the Double Twelve online shopping festival on Saturday. The funds need to be spent by December 27.

According to JD Digits, the financial arm of the online giant, the first digital transaction was made by a consumer two seconds after 8pm on Friday, when the experiment was launched.

The company clarified that almost 80% of the digital currency payments were made by users under the age of 40. At least one transaction exceeded 10,000 yuan (~$1529).

In addition to JD.com, some 10,000 shops in Suzhou are participating in the experiment.

The DCEP trial in the city was larger than in Shenzhen, where 50,000 "red envelopes" were distributed to residents in October.

Yin Cao, managing director of the Shanghai-based  Digital Renaissance Centre, believes the speed of DCEP adoption will be "cautious" despite active testing.

Also, he said: "In 2021, China will continue to look for more scenarios to test the digital yuan, but a large-scale launch is still unlikely".

In his view, mass adoption of digital currency in the country will happen around 2023.

"China should be the first country to launch a digital currency, while nations like the US are looking to generalise its experience and avoid the risks. In a sense, we can only compete with us on this issue and there is no need to rush", Yin Cao added.

It should be noted that Fed chief Jerome Powell has said that it is important for the US not to get ahead of the curve with the launch of digital currency, but to get it right.