The government of China has been working with great agility to achieve its goal of becoming the first nation to introduce CBDC in the region. Other countries have already done, so that include Bahamas, Eastern Caribbean Region, and Nigeria. However, China will be the biggest economy to make the transition, making the prospect such an important transition for the world.
At present, there are more than 250 countries that are researching their local CBDC projects and their broader impact on the economy. During the Beijing Olympics 2022, the Chinese government introduced its CBDC product called digital Yuan on an international scale. To this end, the Shenzhen district administrative body has decided to give away 15 million Yuan worth $2.27 million in the form of digital RMB or e-CNY, according to a recent report by Global Times.
Shenzhen administrators have prepared 130,000 red envelopes to distribute the 15 million digital Yuan distribution program. It is worth noting that red envelopes are customarily used to share monetary gifts within the Chinese culture during special events like Chinese New Year. According to the Shenzhen District officials, the winners of the red envelopes will be decided through a lottery.
The users who hold an account on WeChat payments will be able to enter into the lottery by default. Another important factor to note here is that WeChat is a very popular digital payments application, and most of the population uses it daily for making everyday transactions. The winners of the red envelopes will be able to use their money across five thousand merchants in the district.
All Major Banking Enterprises in China are Participating in Digital Yuan Project
As per the local media outlets of China, eight pilot banking enterprises in China are participating in the digital Yuan promotional campaign. These banks are not only issuing digital Yuan currency support for retail users but also extending the same services on a commercial level for supermarkets, shopping malls, and restaurants. Shenzhen district has arranged CBDC giveaways many times before.
The government has chosen the district once again for the free giveaway due to its largest population percentile. Some financial experts postulate the digital Yuan giveaway can have the same impact as the money distribution policies of the Federal Reserves of the United States on the economy.
Other districts like Xi’an, Dalian, Shanghai, Tianjin, Hainan, Xiamen, Xiong’an, Suzhou, Chengdu, and many others are also conducting trials with CBDC. Chinese Central Bank postulates that last year alone, around 261 million users made transactions using digital Yuan valued at $13 billion.