By
Bhushan Akolkar
May 13th, 2024
The Chengdu lottery will have around 200,000 participants who will receive from $27 to $37.
Chengdu has confirmed the distribution of $6 million in the latest test of the digital yuan by the Central Bank of China. The Southwestern city becomes the latest in a growing list that includes Beijing, Suzhou and Shenzhen.
The latest distribution of $6 million is more than double the last one, conducted earlier in the month. Beijing saw around $1.5 million distributed to 50,000 participants. The Chengdu digital yuan lottery will roughly be distributed to 200,000 participants who will receive around $27 to $37. It is further reported that the handouts are tied to the Lunar New Year and will work with local retailers like JD.com.
The People’s Bank of China has seemingly been doubling its efforts in recent months. Not only has it increased the amount and added new cities like Beijing and Chengdu, but has also enrolled new banks. As Coinspeaker reported, last week the Central Bank made a deal with the first two private banks to pilot test the digital yuan. Tencent’s WeBank and Ant Group’s MyBank joined in a list of six state-owned banks.
China has seen a digital shift in recent years. The economy has been largely dependant on electronic payment with most buyers preferring to use electronic money rather than cash. On this front, the Alipay app and Wechat Pay have been the most popular platforms accounting for around 94% of the industry. With the digital yuan, the government is looking to tap into the industry. And it is not only launching the digital yuan but has also introduced more stringent rules to curb the fintech industry. A move that was considered malicious and aimed to pave way for the digital yuan.
Why China Is Racing to Launch CBDC
The intensity of the tests by the central bank signals initial success and an expeditious rollout. If successful, China will become the first major economy to release a CBDC. This is guaranteed to see the yuan extend its influence around the world. For instance, it could become a preferred settlement currency across borders because digital payments providing speed and transparency. This will put it ahead of the dollar which has been the settlement currency for years. The dollar has long been slow since multiple banks work together for international transfers.
Already there is a collaboration between the People’s Bank of China, the UAE, Hong Kong and Thailand that seeks to explore DLT-based central bank digital currency. Specifically, the collaboration is looking into the possibilities of using CBDCs in regional and cross border payments in real-time
It’s no secret that China is in an economic war with the US. One of the critical factors on who comes out on top is in the race to modernize money. While the US is knee-deep in bureaucracy, China is moving forward spearheaded by the government.