China is reportedly planning to give away 15 million Yuan ($2.3 million) in e-CNY to residents of Shenzhen’s Futian district by the end of this year. With this move, China’s CBDC hopes to boost acceptance of its financial product as well as promote CBDC to the wider community.
As contrasted to its hostile stance towards digital assets, the government of the world’s most populous country has a completely different attitude toward central bank digital currencies (CBDCs). There have been a number of initiatives launched by the authorities in the past year to popularize the digital representation of the national currency.
Global Times reports the latest initiative involves distributing over $2 million worth of digital yuan to residents of Futian (the central business district of China’s third largest city, Shenzhen).
In addition, 130,000 red packets from the e-CNY will also be given away by lottery, using a WeChat-payment system. The residents of the city may enter the draw by registering through the WeChat application. Thereafter, they will be able to use this financial product in almost 5,000 stores in the district with no order minimum.
In fact, it is not the first time the authorities of Shenzhen have given out digital yuan to the city’s residents. In the year 2020, they distributed e-CNY paying a total amount of 15 million yuan (about USD 1.5 million). Soon afterwards, the initiative was expanded to the cities of Chengdu and Beijing, the capital of China. Residents of the former received $4.6 million in the form of Chinese CBDC, while the latter received $6.2 million of it.
By the end of 2021, there will be over 140 million digital wallets for the yuan under the Chinese people’s management, representing about 10% the total population of China. This product gained an increased amount of interest, and the number of users reached over 260 million at the beginning of 2022.
It is estimated that businesses in the local community will accept CBDC as a means of payment in the near future. JD.com, for instance, allowed customers to use that service during the shopping festival, Singles Day (November 11). The Chinese messaging app WeChat also offers its users the ability to make payments in e-CNY. Beijing and Shanghai are among the regions where the service is currently available.
During the Beijing Olympics in February, Chinese officials allowed foreign athletes and visitors to use the CBDC. According to reports, over $315,000 worth of digital yuan were transacted daily during the sporting event.
