Shenzhen, one of the most populous cities in China announced that its residents will be able to receive 20 million digital yuan, worth nearly $3 million as a gift. Shenzhen joins Suzhou to test the real-life use of China’s central bank digital currency.
According to an official announcement, registration of the Shenzhen residents for reservations and data review will be completed by 4 January and the issuance of digital yuan will start on 7 January. The Shenzhen Government stated that it will give away the digital currency in the form of red packets through a lottery.
The city is planning to gift a total of 100,000 red packets, each worth 200 digital yuan. The total value of the mentioned giveaways stands at around $3 million. The winners of the red packet will be able to use the digital currency from 7 January to 17 January across 10,000 merchants.
“Winners of the red envelope can use digital yuan at more than 10,000 designated merchants without threshold consumption, it can not be transferred to others or returned to my bank account. Red envelopes that are not used beyond the expiration date will be withdrawn,” the official announcement states.
Digital Yuan
The recent announcement came after the country’s digital currency completed 20,000 transactions in December 2020. The Chinese city of Suzhou initiated the trial earlier this year to test the real-life use of digital yuan and distributed nearly 20 million yuan via a local lottery for its residents. The Global Times reported in December that nearly 20,000 digital yuan transactions were executed on JD.com as Chinese residents actively participated in the trial project.
Despite the recent trials and successful testing, the mass adoption of China's digital currency looks unlikely. “In 2021, China will continue to look for more scenarios to test the digital yuan, but an extensive launch is still unlikely. The People's Bank of China is relying on social networks to promote the digital currency,” Cao Yin, Managing Director of the Shanghai-based Digital Renaissance Foundation told Global Times.
