By
Tolu Ajiboye
April 17th, 2024
Receivers of the digital yuan giveaway in Shenzhen will be able to spend the red packets across about 5,000 stores within the district.
The People’s Bank of China (PBoC) has continued its CBDC, the digital yuan, by conducting a giveaway in Shenzhen. The Chinese government is giving out 15 million yuan in digital RMB to 130,000 Shenzhen residents. This comes as several central banks globally are intensely working on creating their CBDCs. With 26 million unique users at the end of last year, China is one of the countries that have made significant progress in its digital currency effort. Also, transactions in digital yuan in China were nearly 87.6 billion yuan as of December 2021.
The Chinese government has completed more than one digital yuan giveaway in Shenzhen. Residents got about 10 million digital yuan in October 2020 as part of the pilot test. The red packet was only useful at 3,389 specific stores in the Luohu district at the time. However, the PBoC has included more cities in its digital yuan tests. Notably, red packets or envelopes in China signify good luck and wishes.
Apart from Shenzhen, the Chinese government is testing its digital yuan through a new giveaway in Suzhou, Chengdu, and Dalian. Others are Shanghai, Guangzhou, Changsha, Xiong’an, Qingdao, Hainan, Fuzhou, Xiamen, Xi’an, Tianjin, and Chongqing. Testing is also happening in six cities in the Zhejiang province, including Shaoxing, Jinhua, Wenzhou, Ningbo, Hangzhou, and Huzhou. The upcoming 2022 Asian Games will hold in six cities.
Digital Yuan Giveaway in Shenzhen
According to the government of Shenzhen’s Futian district, 130,000 local residents will receive 15 million yuan ($2.27 million) on the 30th of April. The announcement says the giveaway will be distributed in red packets by raffle through WeChat payment. Interestingly, this is the first time digital yuan issuance will concern all eight pilot banks and also include other sectors like supermarkets and restaurants.
Receivers of the digital yuan giveaway in Shenzhen will be able to spend the red packets across about 5,000 stores within the district. Also, there is no minimum purchase while using the red packet.
Additionally, China has expanded its CBDC pilot program to include tax payments. Reports said the PBoC is working together with the Zhejiang Taxation Bureau to explore different ways to make tax payments. As it stands, residents in three cities in China have started paying taxes. They are also using digital yuan to pay for social security premiums, and stamp duty.
A consultant, Richard Turrin, earlier stated that the digital yuan is positioned to compete with the US dollar in the next ten years. Speaking in an interview with CNBC’s “Squawk Box Asia, Turrin explained:
“Remember, China is the largest trading country and you’re going to see digital yuan slowly supplant the dollar when buying things from China. If we go about five to 10 years out, yes the digital yuan can play a significant role in reducing the dollar’s usage in international trade.”
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Disclaimer: Photo: Depositphotos