China distributes millions of digital yuan to encourage adoption, according to a report.
During the holiday season, governments in a number of Chinese cities gave away millions of e-CNY in an effort to boost consumer spending.
During the Lunar New Year celebrations, the Chinese central bank distributed digital currency (CBDC) worth millions of dollars.
Around 200 “activities’ ‘ for the e-CNY were launched across the country over the holidays, according to a report published on February 6 by the Global Times, an English-language outlet of the state-Daily ruPeople’s newspaper.
The government’s goal with these initiatives was to increase “consumption,” and it marked the first such push since the lifting of COVID-19 regulations.
Reports indicate that more than 180 million yuan ($26.5 million) worth of CBDC was distributed across multiple cities through various programmes including subsidies and consumption coupons.
As one example, the outlet reports that the local government of Shenzhen distributed e-CNY totaling over 100 million yuan ($14.7 million) to subsidise the city’s catering industry.
According to a China Daily article published on February 1st, every resident of Hangzhou was given an e-CNY voucher for 80 yuan ($12) on January 16th. All told, the city dropped about $590,000 on the giveaway.
Some of these programmes ended up being very well received by locals.
According to the report published by Global Times, the e-CNY distributed by the city government of Hangzhou for the New Year celebrations were snatched up by locals in under ten seconds, based on information from the e-commerce platform Meituan.
In recent months, the government has implemented new goals and features intended to increase CBDC usage.
Top Suzhou party officials on February 1st tentatively set a goal to have 2 trillion yuan ($300 billion) in e-CNY transactions by the end of 2023.
The goal is lofty given that total e-CNY transactions only surpassed $100 billion in October, 2016 (two years after the launch of the CBDC).
The ability to send “red packets” called hongbao in China, which is used to gift money around the holidays, was added to the e-CNY wallet app in late December of last year in an effort to attract new users.
In early January, the wallet app received an update that would allow Android users to use their devices for contactless payments even when they did not have access to the internet or a power source.
A former official at China’s central bank acknowledged in December that “usage has been low, highly inactive” in relation to the e-CNY trials, calling the results “not ideal.”