October 15, 2021

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China Giving Out Free ‘Red Packets’ Of It’s Digital Yuan Worth $6.2 Million

According to reports, China is giving out free “red packets” of its digital yuan worth a total of $6.2 million in a Beijing lottery aimed to test the central bank’s digital currency.

According to Reuters, residents of China’s capital city can apply to win one of the 200,000 packets, each of which contains 200 digital yuan ($31.33).

The digital cash, which is distributed via applications, can be used at a limited number of local merchants.

The e-wallet is based on the Chinese custom of handing red envelopes filled with money at special occasions or festivities.

The lottery is part of the People’s Bank of China’s continuing CBDC trials, which include testing and evaluating the digital yuan on a local level before being carried out across the country.

The US and EU central banks are still in the research stages of their own digital currencies, with China being the first large country to advance its CBDC plan to the testing stage.

China is now pursuing a two-tier distribution strategy for its digital currency, with the central bank distributing CBDC to the general public through commercial banks.

People must apply for the Beijing lottery using one of two banking applications that are required to participate in the trial.

It will run until June 6, according to CNBC, and winners will be notified shortly after that. They will have until June 20 to spend the digital currency.

Similar CBDC lotteries have been performed in other Chinese cities, including Shenzhen and Chengdu, and the central bank plans to conduct more local experiments before implementing the currency nationwide.

The digital yuan will be tested for overseas visitors in the 2022 Beijing Winter Olympics.

Digital currencies could ultimately run on blockchain networks like Ethereum, according to Yao Qian, the former head of China’s CBDC operations.

Users would not need a bank account to utilize the digital yuan, so commercial banks would no longer have to act as an intermediary, and financial inclusion would improve, according to Yao.

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