Last week, the People’s Bank of China (PBOC) carried out a lottery, giving 50,000 randomly selected citizens a “red packet” containing 200 Yuan worth of the bank’s digital currency ($30). Plans for the implementation of a digital Yuan have been underway for several years.
The winners were required to download a digital Renminbi app in order to receive and spend the digital money. Consumers could spend the digital currency at over 3,000 designated retailers in Shenzhen’s Luohu district.
The test is part of the digital Yuan pilot programme that is being conducted in various major cities in China. It is the first public test of the digital currency. The idea is to not only test the digital currency, but also to increase consumer spending following the devastating economic effects of the COVID-19 pandemic.
There have been 4 Chinese cities that have begun testing the digital Yuan, including Shenzhen, Suzhou, Chengdu and Xiongan. The Shenzhen pilot programme being the largest test to date. It is believed that the PBOC will further test digital currency at the 2022 Winter Olympics in Beijing.
The COVID-19 pandemic has accelerated a shift away from paper money. China seems to be extremely committed to the adoption of the digital Yuan, having conducted many pilot tests over the last few months, racking up approximately $162 million USD worth of digital Yuan transactions.