China to hand out $6.2 million worth of digital yuan to its citizens as part of a trial.

China will hand out 40 million renminbi ($6.2 million) of its digital yuan to its citizens in Beijing as a part of the central bank digital currency trial.

According to the CNBC report, China will hand out 40 million renminbi ($6.2 million) of its digital currency to citizens in Beijing in a lottery. Residents of the Chinese capital can use two banking apps to apply to win one of 200,000 so-called red packets as part of the lottery, according to the Beijing Local Financial Supervision and Administration Bureau. 

 

The digital currency can be spent with selected merchants.

Each envelope would contain 200 yuan (about $31) of the digital currency that can be spent with selected merchants. The deadline to register is midnight on June 7. The world’s second-largest economy, China, is yet to do a nationwide rollout of the digital yuan. It has been developing its CBDC since 2014 but is instead focusing on trials in the form of lotteries around the country. Li Bo, deputy governor of the People’s Bank of China (PBOC), said in April that the central bank would expand its pilot projects’ scope and even allow foreign visitors at the 2022 Beijing Winter Olympics to use the digital currency.

 

PBOC is aiming to digitalize notes and coins in circulation.

The southwestern Chinese city of Chengdu handed out 40.2 million yuan of the digital currency. Last year, other cities, such as the Chinese technology hub of Shenzhen, held their own lotteries. China’s efforts are an example of a central bank digital currency (CBDC), and the PBOC is aiming to digitalize bank notes and coins in circulation. Earlier, the PBOC Deputy Governor Li reiterated the digital yuan was for domestic use and not an attempt to challenge the dominance of the U.S. dollar.

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Jai Pratap
Jai Pratap
A Mass Media Graduate who loves to write. Jai is also a sports enthusiast and a big movie buff. He loves to learn new things.

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