Chinese central bank to give away 10 million digital currency. In what some see as the country’s first public test of the digital yuan payment system, China’s central bank is going to issue 10 million yuan ($2 million) of digital currency to 50,000 randomly selected consumers.
As central banks worldwide race to issue digital currencies to modernise payment systems and fend off possible competition from privately issued cryptocurrencies, the People’s Bank of China (PBOC) campaign arrives.
Starting on Friday (local time), any person in the southern Chinese city of Shenzhen can apply to enter the programme via the country’s four major banks. But only some, according to the local government and the lenders, will be awarded a 200-yuan “red envelope” through a lottery.
Anyone in Shenzhen can apply until Monday to enter the lottery, while winners will be awarded the red envelope on October 12 after they download and register for a digital wallet with an app for the digital currency.
In Shenzhen, including Sinopec gas stations, Walmart stores, CR Vanguard malls and Shangri-La hotels, the winners will use the digital currency in 3,389 retail outlets. “This is the first public test of digital yuan, and has huge significance,” Chief analyst at Merchants Union Consumer Finance, Dong Ximiao said.
He proposed that the PBOC extend pilot schemes to more Chinese cities and formally introduce the digital currency to meet public needs as soon as possible. A PBOC statement last month said that in its push to internationalise the yuan and reduce its dependency on the global dollar payment system, China needs to become the first nation to issue a digital currency.
However, Flex Yang, founder and CEO of crypto finance firm Babel Finance, said technology alone doesn’t automatically earn digital yuan global acceptance. “It depends on whether other countries are willing to accept the digital yuan payment system. It’s a political issue, not a technological one. We look forward to its future development as it is still in the early stage.”
[image: Nuno Alberto]