BUSINESS Shenzhen to distribute 10 million yuan in digital currency to residents to boost consumption

BUSINESS

Shenzhen to distribute 10 million yuan in digital currency to residents to boost consumption

Global Times

17:23, October 09, 2020

Digital currency (File photo: VCG)

Shenzhen in South China's Guangdong Province will distribute 10 million yuan ($1.49 million) to its residents, in the form of digital currency, from Friday with the central People's Bank of China (PBC). Local government said that the practice aims to encourage consumption and is a regular test of digital currency.

Residents need to apply in advance for an online lucky draw in order to be in the running for the digital money, according to local government. The money, seen as virtual "red packets," will be deposited to the individual's digital currency wallet from 6 pm on October 12.

A total of 50,000 such "red packets" will be distributed, each containing 200 yuan. Winners of the red packets need to download and register for a digital currency app to claim the money.

They can spend the money in over 3,300 shops in the city's Luohu district that have completed the transformation to the digital currency system, from 6 pm on October 12 to October 18 without any threshold on the sum of bills, local government said.

The development of China's digital currency has achieved promising initial results and is undergoing internal testing, Fan Yifei, deputy governor of the PBC said during a payment and settlement forum on September 24.

Fan also revealed at the Silos banking and financial conference on Monday that 3.13 million transactions using digital yuan have been processed so far, Jiemian News reported. Over 6,700 digital yuan use cases were recorded in the tests, covering bill payments, transportation and government services..

China started to develop digital currency in 2014 and has been speeding up its research and development of DECP in recent years. The Chinese central bank's digital currency DC/EP project started pilot tests in April in the Xiongan New Area of North China's Hebei Province, Suzhou of East China's Jiangsu Province, Chengdu of Southwest China's Sichuan Province, and Guangdong's Shenzhen.

The Ministry of Commerce announced in August that the pilot will be expanded from these areas to include neighboring cities, that is the Beijing-Tianjin-Hebei Region, the Yangtze River Delta, the Guangdong-HK-Macao Greater Bay Area, and central and western China.

The digital currency will also be tested in scenarios for the upcoming 2022 Winter Olympic Games in Beijing and Zhangjiakou in Hebei Province.

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