Starting from 8 p.m. Beijing time Friday, 100,000 residents in Suzhou city of Jiangsu province will be joining the most recent citywide test of the central-bank-backed currency, the digital yuan.
Residents who won a virtual red packet with 200 yuan ($31) from a lottery by Suzhou municipal government can spend the digital money online or at certain offline locations in Suzhou.
State-owned Bank of China, China Construction Bank, Industrial and Commercial Bank of China, Agricultural Bank of China, Bank of Communications and Postal Savings Bank of China are participating in the trial that is distributing 20 million in virtual yuan.
All digital yuan wallets have access to the e-commerce company JD.com.
Timing Is Crucial
The virtual money is valid through Dec. 27 - covering the Double Twelve shopping festival and Christmas.
Double Twelve, or Dec. 12, is one of China's biggest online shopping festivals. In 2011, Taobao, Alibaba's e-commerce marketplace, introduced the concept - attracting buyers with discount offers. It was soon picked up by others including JD.com.
This year's Singles' Day event was extended from 24-hours to 11 days in an effort to stimulate the domestic economy. Alibaba and JD.com racked up nearly $115 billion in sales - both records. The JD.com transaction volume was $40.97 billion.
Analysts said the currency test will encourage user interaction - especially while online shopping. E-commerce companies that attract buyers with foreign brands will continue to boom owing to travel restrictions.
A More Extensive Trial
Suzhou is the second citywide test. In October, China introduced its sovereign digital currency to Shenzhen, a city with 13 million people.
In Shenzhen 2 million residents signed up for the lottery and 500,000 had a chance to spend a combined 10 million digital yuan in fewer than seven days.
"The application of China's digital currency can effectively meet the public's demand under today's digital economic conditions," People's Bank of China Gov. Yi Gang said. "It also provides convenience and security in retail payment."
As many as 100,000 Suzhou residents are involved and the trial will last for more than two weeks. Analysts said the scope and the scale of the Suzhou test appear to be more extensive.
As much as $299 million in digital yuan has been used in 4 million transactions in Shenzhen, Suzhou, Xiong'an and Chengdu, according to Yi's statement.
On the Shoulders of An E-Commerce Giant
Nearly 10,000 physical shops, including supermarkets, restaurants and convenience stores across Suzhou will accept digital currency payments.
Suzhou's municipal government said it will select about 1,000 lottery winners to try out offline payments. JD.com's proprietary offline stores are among them.
The Suzhou outlet of JD Electric announced its operations Friday - marketing itself for "freshly trying out digital payments." Additionally, JD Convenience Store also pledged support.
JD Digital Technology is the technology provider behind the red-pocket trial. In September, JD Digits cooperated with the PBOC to "build a crypto-yuan wallet ecosystem" and shape innovation in online and offline digital yuan.
