JD.com Joins PBOC on Digital Yuan Project

UTC by Teuta Franjkovic · 3 min read
JD.com Joins PBOC on Digital Yuan Project
Photo: Depositphotos

JD.com, one of the biggest eCommerce businesses in China, will work with PBOC on the development of the digital currecy project.

The tech and a payments-focused subsidiary of Chinese e-commerce company JD.com Inc (HKG: 9618) announced it has partnered with the Digital Currency Research Institute of the People’s Bank of China. According to the local media reports, JD Digital Technology and the Digital Currency Research Institute intend to bolster the expansion of mobile applications and blockchain platforms that stand in line with PBoC anticipated central bank digital currency (digital yuan). The two parties also plan to advance the production of wallets that support China’s digital money.

The mobile apps should allegedly bolster the digital renminbi and, according to the company, they should be unified together with JD Group’s actual platforms and utilities.

Until now, China used to be the best bet when talking about the global CBDC race. For example, back in June this year, the vice president of PBoC’s National Council for Social Security Fund, Wang Zhong min, said that the central bank had finished the tailpiece architecture evolvement of its digital currency.

Major Chinese companies like DiDi Chuxing, the Chinese Uber, streaming platform Bilibili and China’s largest wholesale and delivery platform Meituan Dianping are already cooperating with PBoC in handling pilots for the digital currency.

According to the August report, China’s Commerce Ministry distributed its ideas to extend the CBDC trials to Beijing, Tianjin and Hebei provinces. Some of the pioneer projects were also included in the Hong Kong Greater Bay area dwelling within the nine cities including Guangzhou, Shenzhen, Hong Kong and Macau.

PBOC Persistent for China to Be First to Have CBDC with Its Digital Yuan

A few days ago, PBOC said that it will be persistent in its ambition for China to become the first country to issue a digital currency so it can diminish its dependence on the global dollar payment system.

The bank stated that the publication and circulation of the digital yuan would bring huge adjustments to current international finance.

The thing is, China needs to authorize a new payment system network to stop the dollar monopoly as a key part of the yuan internationalization.

What we know, for now, the PBOC digital currency research unit has filed 130 patent applications regarding cryptocurrency ranging from issuance, circulation to the application as of end-April. All of these things will make a total supply chain to bolster the initiation of digital currency.

In April, the PBOC’s digital currency institute said it was doing some internal trials of a digital currency electronic payment system in four cities and that it planned to pioneer the system at future Winter Olympics locations.

The PBOC set up the research team a few years ago in order to analyze the likelihood of initiating a digital currency to slash the cost of circulating paper money and bolster governments’ control of the money supply.

Central Banks Don’t Need Blockchain

In the meantime, executives at major European central bank executives said that retail central bank digital currencies do not need the use of blockchain technology.

Thomas Moser, an alternate member of the governing board at Swiss National Bank, and Deutsche Bundesbank’s Martin Diehl spoke about the state of CBDCs and agreed that global retail CBDC projects do not need blockchain.

Moser said that the main use cases for blockchain intend to provide trust when a project has no central party.

He said:

“If you have a central bank, then this is the central party. And if you trust that central party, I think then it’s not really straightforward to reason that you need a blockchain.”

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