cryptocurrency

China moves closer to nationwide digital currency launch


The Shenzhen government has given away $3 million worth-of Digital Yuan as it conducts a CBDC test

China is close to launching its central bank digital currency (CBDC) following an announcement from the Shenzhen government on New Year’s Eve regarding a third CBDC test. The test will be conducted in the south-eastern Chinese city of Shenzhen. A total of 20 million Digital Yuan ($3 million), will be used in the test.

The sum will be delivered to residents in 100,000 red packets through a lottery system, each worth 200 Digital Yuan. The winners of the lottery can use the sum in more than 10,000 commercial centres and restaurants in the metropolis. The test is expected to run from 7 January to 17 January. The previous tests were completed in October and December last year.

The first test was conducted via a giveaway of 10 million Digital Yuan. 50,000 residents were targeted in the test, spending the money across nearly 3,000 local stores. The second test took place in the manufacturing hub of Suzhou with double the scope i.e. 100,000 city residents. A collective 20 million Digital Yuan was used in the exercise that ran in mid-December.

The timing of the Suzhou test couldn’t be any better as the giveaway was conducted on the eve of the ‘double twelve’ shopping festival on 12 December.  The lottery winners were allowed to spend the money on online stores in JD.com, a perk that has been retracted in the third test. The Suzhou test was finalised on 27 December.

The online payment feature, however, isn’t the only thing present in the Suzhou test that will be missing in the latest test. The offline touch-to-pay function will also be absent in the Shenzhen test. Beijing Business Today reported that after the Suzhou test, it was noted that there were some bugs in the offline touch-to-pay function. Hence, the option will not be used in the latest Shenzhen test.

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