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China’s Digital Yuan gets Smart Contract Functionality Alongside New use Cases

In recent days, China’s central bank digital currency (CBDC) has seen new use cases, such as purchasing shares and making offline payments.

China’s Central Bank Digital Currency (CBDC) — the digital yuan, or eCNY — has been upgraded to include smart contract capability as well as a slew of new use cases.

According to a Jan. 17 article by local bitcoin media site 8btc, the smart contract capability was launched on the Meituan app, a Chinese app that offers retail and food delivery services.

A smart contract is triggered and searches for keywords and purchased items in Meituan customers’ orders when they place an order and pay with their e-CNY wallet. If a user purchases something from the list of keywords for the day, they are entered into a drawing to win a portion of a prize.

The award is a share of a “red envelope,” or hongbao in Chinese, containing 8,888 yuan, or slightly more than $1,300.

Hongbao are little packets of money that are usually given as a good luck gesture around Chinese New Year.

In December of last year, the e-CNY wallet app included a function that allowed users to send digital red envelopes in an effort to increase adoption before the Chinese New Year on January 22.

Along with the most recent development, new applications for the e-CNY have been added in recent days.

According to a January 16 story in the China Shares Journal, e-CNY was utilised for the first time to purchase securities. Investors can also use the CBDC to purchase stocks through the Soochow Securities mobile app.

According to a Jan. 11 Yicai Global report, the digital yuan wallet app has also been updated, with users now able to conduct contactless payments using Android phones even if their device lacks internet or power.

The new applications for the digital yuan come as China struggles with CBDC adoption.

In December 2022, a former official from the People’s Bank of China (PBOC), the country’s central bank, made a rare public acknowledgment that the digital yuan’s “use has been low” and “very inactive,” adding that “the outcomes are not ideal.”

On January 10, the PBOC included e-CNY for the first time in currency circulation figures, disclosing that the CBDC represented around 0.13% of the 10.47 trillion yuan ($1.54 trillion) in circulation at the end of 2022.

 

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