This central bank initiative could be good fortune for domains.
Red packets are meant to bring good fortune, which happened on December 11 when 100,000 digital red packets each containing 200 yuan (about $30) were distributed to Suzhou residents in a lucky draw.
It was a pilot test for rolling out Digital Currency Electronic Payment (DCEP). DCEP represents a new form of currency (digital yuan) and a new form of payment (via digital wallet storing digital yuan). The official launch date has not been announced.
Digital yuan will be issued by China’s central bank as a legal tender and each digital yuan is equivalent to one physical yuan. To handle the money, you need to download an authorized wallet app to your mobile phone. Salary will be deposited to your digital wallet and you can pay for purchases at any digital or physical store.
DCEP is a game-changer in that buying and selling can be done directly without any third-party payment provider. Payment for purchases can be as simple as having the buyer’s phone touching the seller’s phone — and it works even without the internet. Of course, DCEP will be equally powerful in the digital world. The result will be a great increase in new businesses.
After DCEP is launched, I think the Chinese government will then globalize digital yuan through the One Belt One Road initiative, RCEP regional economy agreement, and other economic partnerships. This move will also see more and more Chinese companies going global.
The implication is that long term demand for domains will increase, and there will be more interest in domains suitable for global operation, such as English-based domains, pronounceable Pinyin domains, short acronym domains, and meaningful numeric domains. For details, please read “A small history lesson and its implication on domain investment“.