China has distributed more than $40 million worth of digital yuan so far as part of the world's most advanced digital currency initiative. CBDC's promotional efforts are now focused on five major cities, taking into account regional development priorities.
China distributes e-yuan for $40 million
The experimental rollout of the digital RMB, the central bank digital currency (CBDC) issued by the People's Bank of China, is progressing rapidly in China. The project is now in its eighth year of development, including large-scale experiments on the mainland and cross-border tests with Hong Kong. It was first announced in 2014.
The "Red Envelope" campaign, created to get the digital yuan into the hands of Chinese consumers, is growing in popularity. According to research by the Tuoluo Research Institute, the amount of money transferred to Chinese citizens in digital red envelopes has exceeded 269 million yuan - or about US$41.5 million.
Red envelopes are usually small packets of money that, according to Chinese custom, are given to children, family members, friends or colleagues for good luck. In China, the colour red is associated with vitality and good luck.
According to an article published by Chinese crypto news outlet 8btc, the government is currently focusing its efforts on five major cities: Shenzhen, Suzhou, Beijing, Chengdu, and Shanghai. Authorities there have issued 230 million Chinese yuan (about $35 million) in red envelopes of digital RMB.
China speeds up rollout
The central government "takes into account regional development goals, and the frequency and scale of promotion are accelerated outward," the report says.
In the Chinese capital, two pilots have made tremendous progress. Under the first, selected merchants in the Wangfujing business district and the online marketplace JD.com have begun accepting digital currency payments. The second trial focuses on food, accommodation, transit, travel, commerce, entertainment and information at the 2022 Beijing Winter Olympics.
Meanwhile, Shenzhen, China's industrial and financial centre, has spent 60 million yuan ($9 million) in RMB digital envelopes. The CBDC's application scenarios have gradually expanded to include government services such as medical care, education and transportation, as well as consumer goods. Over 30,000 merchants in the city are now trying to implement digital yuan payment options.
Chengdu has distributed 40 million digital yuan (nearly US$6 million) so far. The pilot project has attracted at least 11,000 retailers. They work in a variety of industries, including restaurants, retail and entertainment. Chengdu has also launched a trial of digital yuan in the city government's public transport system. Chengdu's red envelope initiative, according to Tuoluo, "highlights the qualities of digital currency - small value, high frequency trading and inclusive finance".