China is set to give out $1.5 million in its promotion of its central bank digital currency. A pilot program of the currency will be launched by the major Chinese city of Shenzhen in promote the currency by giving out a public giveaway.
On Oct. 9, Sina Finance made a report on this, stating that Shenzhen would collaborate with china’s central bank and distribute the public giveaway, which would total 10 million digital Yuan ($1.5 million). The Digital Yuan is China’s Central Bank Digital Currency.
According to Sina Finance’s report, Shenzhen’s Luohu District will fund the giveaway pilot and the money will be distributed through a lottery to 50000 people. The residents will need to apply to participate through an online platform, and the residents can start this application on Oct.9.
The report states that each ‘gift’ will be worth 200 renminbi and the recipients can spend it starting Oct. 12 through Oct. 18 at any of the provided 3389 merchants in Shenzhen’s Luohu District. Only the participant issued the gift money can spend it. It cannot be transferred to someone else or redeemed into a bank account. After Oct. 18, any amount that has not been spent by will be taken back from the winners.
The Central Bank Digital Currency
China has been in the plans to create a central bank digital currency for some time now in a bid to join create a digital currency owned by the government, and promote it to the world.
The launch of the pilot is part of the government’s plan to do this promotion. The digital Yuan, also known as the digital currency electronic payment (DCEP) was piloted in China in April 2020. During this time, the pilot app was available for download in four select cities in china; Shenzhen, Chengdu, Suzhou, and Xiongan. Currently the app is being tested by nine cities including Hong Kong, Guangzhou, and Macau.
These central bank digital currency pilots are moving rapidly as an announcement on Oct. 5 by People’s Bank of China deputy governor, Fan Yifei, stated that the DCEP wallets had processed 1.1 billion renminbi ($162 million) in transactions between April and August 2020. The report also states that china’s central bank opened 113300 personal digital wallets and 8859 corporate digital wallets within the digital Yuan initiative.
China is on a league of its own, as it is the first country to move this far in the creation of a CDBC. Although there have been other countries with similar visions, none has made it this far with a pilot version.
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