Programs to test and encourage the widespread adoption of China’s central bank digital currency known as Digital Currency Electronic Payment or the digital yuan are continuing.
As a New Year’s Eve offering, the city of Shenzhen has been offering its residents the opportunity to register to participate in a municipal lottery since last Friday, and registrations close this morning, Monday, at 10:00 AM local time. Those interested were able to sign up for the raffle using the iShenzhen event registration platform, according to one Announcement by the Shenzhen Government. Strictly speaking, the lottery is not a competition, but is settled on a first come, first served basis.
In total, the city plans to give out 100,000 “red envelopes” to lottery winners, each containing 200 digital yuan (about $ 31). The combined value of the envelopes is estimated to be around $ 3 million, and recipients can spend their donated currency on 10,000 supported merchants. The envelopes are only active for 10 days, after which the currency expires.
To spend their currency, lottery winners must download and install an app and open a personal digital wallet, having previously provided their ID cards and cell phone numbers for registration.
As previously reported, China’s highly anticipated digital currency had already been used in more than 4 million transactions in November 2020, with a total value of more than 2 billion yuan ($ 299 million). Since April 2020, pilots have been running with early trials focused on large cities such as Shenzhen, Chengdu, Suzhou and Xiongan.
The unveiling of the digital yuan has drawn officials and reporters to analyze its potential geopolitical implications and its potential impact on a global financial system that continues to revolve around the US dollar as a global reserve currency. In mid-December 2020, the South China Morning Post quoted Zhou Xiaochuan, president of the Chinese Finance Association and former Governor of the People’s Bank of China, as claiming that the DCEP does not intend to replace global fiat currencies such as the US dollar or the euro.