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China Doles out Millions in Digital Yuan in a Bid to Boost Adoption: Report.

Several Chinese city governments have distributed millions of e-CNY to encourage consumption during the holiday season.

Millions of dollars worth of China’s Central Bank Digital Currency (CBDC) were distributed across the country during the Lunar New Year holiday to increase adoption.

Around 200 “events” for the e-CNY were introduced across the country during the holiday period, according to a Feb. 6 report in the Global Times, an English-language subsidiary of the state-run People’s Daily newspaper.

These “events” was created to “encourage consumption” and are the first of their kind since the government recently removed COVID-19 rules.

Several localities reportedly distributed about $26.5 million, or 180 million yuan, in CBDC-related programs such as subsidies and consumption incentives.

According to the site, the Shenzhen municipal government distributed about $14.7 million (100 million yuan) in e-CNY to aid the city’s catering industry.

According to a Feb. 1 China Daily story, Hangzhou distributed a $12 (80 yuan) e-CNY ticket to each inhabitant on Jan. 16, with the exclusive giveaway costing the city roughly $590,000, or 4 million yuan.

Some of these projects were well received by communities.

The Global Times reported, using data from the e-commerce platform Meituan, that the e-CNY given away by the Hangzhou municipal administration for New Year celebrations was scooped up by citizens in nine seconds.

Other aims and features to increase CBDC usage have been implemented by the government in recent months.

On Feb. 1, senior ruling party leaders in Suzhou established a provisional key performance indicator of $300 billion (2 trillion yuan) in e-CNY transactions by the end of 2023.

The goal is ambitious, given that cumulative e-CNY transactions will have exceeded $14 billion (100 billion yuan) in October 2022, two years after the CBDC’s inception.

In an effort to attract new users, the e-CNY wallet app included the ability to send “red packets,” known as hongbao in China, which were used for gifting money around the holidays in late December last year.

In early January, the wallet software received an update that enabled users to make contactless payments using Android phones, even if their device did not have internet or electricity.

In December, a former Chinese central banker described the e-CNY trials as “not optimal,” admitting that “use has been minimal, highly inactive.”

 

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