China doles out millions in digital yuan in bid to boost adoption: Report
china : Multiple Chinese city governments have given away millions worth of e-CNY to try to promote consumption around the holiday season.
Millions of dollars worth of China’s Central Bank Digital Currency (CBDC) has been handed out across the country over the Lunar New Year period in a bid to boost its takeup.
According to a Feb. 6 report in the Global Times, an English-language outlet of the state-ran People’s Daily newspaper, around 200 “activities” for the e-CNY were launched across the country during the holiday period.
These “activities” were made to “promote consumption” — the first of such since the government recently relaxed COVID-19 restrictions.
Multiple cities reportedly gave away over $26.5 million, or 180 million yuan worth of the CBDC in programs such as subsidies and consumption coupons.
One example provided by the outlet included the Shenzhen local government handing out over $14.7 million (100 million yuan) worth of e-CNY to subsidize the catering industry in the city.
A Feb. 1 China Daily report said Hangzhou issued each resident a $12 (80 yuan) e-CNY voucher on Jan. 16 with the total giveaway costing the city around $590,000, or 4 million yuan.
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Some of these initiatives proved to be very popular among residents.
Citing data from the e-commerce platform Meituan, the Global Times rreport stated that e-CNY given away by the Hangzhou city government for the New Year celebrations was taken up by residents within nine seconds.
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The last few months has seen the government enact other targets and features to boost the usage of the CBDC.
On Feb. 1, senior ruling party officials in Suzhou city set a tentative key performance indicator for the end of 2023 to have $300 billion (2 trillion yuan) worth of e-CNY transactions in the city.
The target is ambitious considering cumulative e-CNY transactions had crossed $14 billion (100 billion yuan) in October 2022, two years after the CBDC’s launch.
In late December last year, in a bid to attract new users the e-CNY wallet app introduced the ability to send “red packets,” called hongbao in China, which is used for gifting money around the holidays.
The wallet app received an update in early January allowing users to make contactless payments using Android phones — even if their device is without internet or power.
In December, a former Chinese central banker called the results of the e-CNY trials “not ideal,” and admitted, “usage has been low, highly inactive.”