China: Digital yuan tested in Shanghai shops

A first for Shanghai businesses

Following many advances towards the digitization of its currency, China continues to move towards a future democratization of its digital yuan. In Shanghai over the weekend, department stores such as New World City and New World Daimaru, as well as caterer Taikang Food Store, accepted payments in digital yuan.

It was on International Women’s Day and in order to boost sales that this action took place. The New World City store had contacted commercial banks to offer discounts to their customers in addition to a promotional campaign.

Obviously, this proposal for new means of payment worked, as institutions recorded thousands of transactions in digital yuan. For the New World City store, sales increased tenfold by contribution to last year over the same period.

“We worked to upgrade the digital payment system prior to the trial program, and we believe it has further stimulated buyers in addition to the existing promotional campaign,” said Li Wei, New World Brand Manager.

Several banks have supported the various businesses to launch this first attempt at buying with digital yuan. The Bank of Communication offered 100 yuan (about 13 euros) in digital coupons to 6,500 local buyers.

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China Construction Bank, on the other hand, offered digital coupons worth 150 yuan (about 19 euros) valid for any purchase of more than 380 yuan (49 euros) to 2,000 people.

People who received these coupons had to install a payment app on their smartphone in order to take advantage of this benefit. One of the advantages of this application: the ability to use its coupons via its virtual wallet while being offline.

The digital yuan, a real success

Following this first successful trial in different shops, the city of Shanghai should repeat the experience. Shanghai is expected to make digital yuan payments available to all merchants at Nanjing Pedestrian Road by May.

According to the Shanghai Daily newspaper, the next trial program could involve more people.

According to Li Lihui, former president of the Bank of China, the issuance of digital currencies benefits the country’s financial security and monetary sovereignty. He stressed that China should accelerate the legalization of technological requirements for the digital yuan and optimize the structures put in place.

China has seen many digital yuan-related projects expand across its territory in recent months. Digital yuan atMs and the payment service set up by WeChat have already been made available to the public and appear to have met with a positive reception.

With the 2022 Winter Olympics fast approaching, Song Lu, a researcher at Renmin University in China, expects a massive rollout of the digital yuan in the near term.

 

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