The People’s Bank of China’s digital currency is at an incredibly advanced stage of development. After providing impressive operational figures for its first tests, the authorities will offer – via a lottery – digital yuan to test their Digital Currency/Electronic Payment (DC/EP).
1.5 million dollars worth of “e-yuans” to be won
According to the local newspaper South China Morning Post, the leaders of the People’s Bank of China (PBoC) are imaginative in getting citizens interested in its new digital currency system, the famous DC/EP.
Thus, in agreement with officials of the city of Shenzhen – located on the border with Hong Kong – a total of 50,000 “red packets” (red envelope) will be distributed to the population by drawing lots.
A total of 10 million digital yuan will be distributed, or nearly 1.5 million dollars. Each of the gift envelopes will therefore contain 200 e-yuans (about 30 dollars).
Any Chinese citizen living in Shenzhen can register for the lottery via iShenzhen, a blockchain-based utility application run by the city government.
Winners will receive a download link to the official DC/EP application, called Digital Renminbi App – this is not available for public download.
Yuan to spend in 3,389 Shenzhen shops
As the State’s cryptocurrency system is being tested, these e-yuans will, however, have to be spent quickly. The lucky winners will have just one week to use their winnings, in one of the 3,389 shops selected by the city authorities.
In addition to the DC/EP test, this should give a small stimulus to local consumption, according to Dan Wang, chief economist of China’s Hang Seng Bank :
“A back-of-the-envelope calculation would suggest that this 10-million-yuan program will generate at least 50 million yuan in total demand. »
According to the banker, the “advantage” of this digital currency is that regulators will have full details of where the money is being spent so that they can better plan targeted economic stimulus programs. Is this hyper-monitoring desirable? That’s a different story altogether.
China’s DC/EP is still on a very dynamic course. Meanwhile, the European Union is still in the starting blocks and the United States is still hesitating to participate in this race for central bank digital currencies (CBDCs). As a result, the Middle Kingdom appears to be increasingly ahead of its competitors.