China hands out digital Yuan aiming to boost adoption

06 Feb 2023

China’s government has distributed millions of Dollars-worth of the country’s central bank digital currency (CBDC) throughout the country over the Lunar New Year holiday in a move to bolster adoption.

Some 200 activities for the so-called e-CNY were introduced across China over the holiday, Global Times reports. These activities were designed to “promote consumption”, the first time the government has done this since easing the Covid restrictions.

According to reports, numerous cities handed out 180 million Yuan ($26.5 million) worth of the CBDC via subsidies and consumption coupons, Cointelegraph reports.

Indeed, the Shenzhen local government distributed more than 100 million Yuan worth of the e-CNY to subsidise the local catering industry.

In addition, Hangzhou residents were each issued with an e-CNY voucher worth 80 Yuan in the middle of last month, totalling around 4 million Yuan.

Over the past few months, the government has unveiled other objectives to bolster CBDC adoption. Earlier this month, officials in Suzhous set a target performance indicator of 2 trillion Yuan worth of e-CNY transactions in the city by the end of this year.

In addition, in another move to boost the number of new users, at the end of last year the e-CNY wallet app included the ability to send so-called “red packets” in the country, used to gift money during the holidays.

Moreover, the app was updated at the beginning of the year permitting users to carry out contactless payments from Android devices, even without being online.

However, a former Chinese central banker described the results of the digital Yuan trials as “not ideal” and said “usage has been low, highly inactive.”