Chinese e-commerce company JD.Com Inc. said on Saturday that it is the first to accept Beijing’s digital currency.
JD Digits, the fintech branch of the company, will accept the digital yuan as payments on the online site as apart of an experiment, according to the post in the company’s WeChat account.
Citizens of Suzhou, near Shanghai, will receive digital yuan experimental giveaway of digital yuan in a lottery. The municipal government and the People’s Bank of China (PBOC) will issue 200 digital yuan “red envelopes” to 100,000 customers that have been selection.
The Suzhou experiment is the second lottery that took place, after PBOC issued 10 million yuan worth of digital currency to 50,000 randomly selected participants in the city of Shenzhen.
According to PBOC governor Yi Gang, more than 2 billion yuan has been spent using China’s digital currency, and over 4 million transactions.
What does this mean for crypto?
Governments and central banks around the world have been hinting at implementation of central bank digital currencies (CBDC), but China is leading the pack. Whilst further research and regulation is in the probably future for Bitcoin, and Facebook’s libra faces backlash, China is closing in on the almost inevitable future for transacting.
Crypto currencies such as Bitcoin (BTC), Ethereum (ETH), Ripple (XRP) to some degree will face a challenge being widely adopted quickly due to complexity. As it stands now, the likes of Bitcoin is being used more as an asset investors can take advantage of.
Scalability is still an issue for crypto, but more than likely a CBDC can eradicate that. Does this mean the crypto currencies we see today will eventually end at zero value? Absolutely not. In all honesty, out of the 7,863 currencies in existence (according to coinmarketcap.com) more than likely we will see a large number of them cease to exist. Especially since Bitcoin alone, makes up 62% of the entire market cap of decentralised crypto currencies.