Chinese city of Shenzhen announced on New Year’s Eve that as part of the third CBDC test, it plans to give residents $ 3 million in digital yuan. The catch is that residents will only be able to spend coins between January 7 and 17.
The third digital yuan test
China is getting closer to the official introduction of CBDC, known as digital yuan or digital RMB. To facilitate its smooth launch, it had to undergo several tests. Consequently, the government of the Chinese metropolis Shenzhen has revealed plans to distribute 20 million digital yuan (about $ 3 million) to the city’s residents. This is the third pilot in Shenzhen. Its purpose is to simulate real interactions with China’s proposed government currency.
According to an announcement published four days ago, the city will send out 100,000 “red packages” in the form of lottery tickets. Each package is worth 200 digital yuan, or about $ 30. The packages can be issued in over 10,000 supermarkets, shops and restaurants all over the city. Lottery winners will be able to spend them within 10 specific days, i.e. from January 7 to 17, 2020.
Previous digital yuan tests
In October last year, the city of Shenzhen conducted the first-ever digital yuan test. The packages distributed during this test were worth $ 1.5 million. Likewise, they were distributed through a lottery that won over 50,000. residents. However, at that time, winners were only allowed to spend digital yuan in around 3,000 stores (around 7,000 less compared to the latest test).
The second test took place in Suzhou city in December. More than 96,614 residents attended and reportedly spent the majority of their free $ 3 million digital yuan. Most of the expenses took place in brick-and-mortar stores and on the popular e-commerce platform JD.com.
In early November, Yi Gang, president of People’s Bank of China, said digital yuan pilots had already processed more than four million transactions. The total amount processed at the moment is 2 billion yuan ($ 299 million). The official presented his insights at the Hong Kong Fintech Week conference on November 2.