Suzhou is set to become the second Chinese city to roll out the digital version of the national currency, Yuan. The launch is slated to be conducted through a ‘red envelope’ during the country’s Double 12 shopping event that usually takes place on Dec. 12.
Digital Yuan pilot scheme continues in China
The upcoming launch in Suzhou follows in the wake of a successful pilot scheme conducted initially in the city of Shenzhen in Oct. 2020. The continuation of the digital Yuan pilot scheme across a second city could prove to be a statement of intent by the Chinese government about its digital currency ambitions. The Chinese government together with the People’s Bank of China (PBoC) is using these city-based launches to experiment with the digital currency with their success having a huge bearing on a nationwide rollout.
The Chinese business community on the other hand has warmed up to the idea with several enterprises within the district reportedly having already installed the necessary equipment to facilitate the digital currency transactions. Majority have set up near-field communication QR codes system in preparation for the pilot scheme during the Double 12 shopping day.
Suzhou rollout an upgrade from Shenzhen scheme
During the Shenzhen pilot scheme, a total of 10 million digital Yuan was distributed to some 50,000 lucky winners of the red envelope lottery. Over 95% of these winners were recorded to have spent their 200 digital yuan winnings within just two weeks of their issue. This was despite the limitation in the issued panda wallets making it impossible to use the digital currency offline. Furthermore, users could not access the touch function on their digital wallets.
The Suzhou rollout is however different from the Shenzhen scheme in that it has both the touch functionality and users will be able to transfer the digital Yuan even if they are not connected to a network.
This is a considerable upgrade on the initial pilot scheme that will come in handy during the Double 12 shopping festival allowing users to pay for purchases by simply touching their phones. The lessons from this scheme will provide additional insights to the Chinese government and the PBoC as they continue to streamline the digital currency payment structure in anticipation of a nationwide launch.
The outcomes will also greatly inform the beta trial schedule for launch in the city of Chengdu and the 2022 Winter Olympics venue.
Image courtesy of Wikimedia