Shenzhen Continues CBDC Trials, Distributes Another $3 Million in Digital Yuan

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Crypto Regulation
Shenzhen Continues CBDC Trials, Distributes Another $3 Million in Digital Yuan

The Chinese city of Shenzhen is preparing for its third test for China’s central bank digital currency (CBDC) project known as digital currency electronic payment (DC/EP), as it plans to distribute $3 million in digital yuan in a red packet event.

Shenzhen Conducts Digital Yuan Distribution in Longhua District

According to local news outlet Yangcheng Evening News on Thursday (Jan. 21, 2021), the Shenzhen government is planning to distribute red packets to residents in the city as part of its efforts to continue trial of China’s digital yuan. The program would take place in the district of Longhua.

Unlike the previous lottery events that involved individuals, this red packet event would only cover employees of some commercial entities in the city. The program would see the distribution of 200 digital yuan ($30) to 100,000 lucky winners, bringing the total amount to 20 million digital yuan ($3 million).

Meanwhile, the workers would need to meet certain requirements to be eligible for the airdrop. First, residents would have purchased their social security from the commercial entities they work for, and secondly, participants would be in Shenzhen during the Spring festival.

Furthermore, the red packet digital yuan program would commence on January 26, 2021. The lucky winners would also spend their free “coins” between February 1 and February 9, 2021. Like the past two distribution events, winners can spend their money at more than 3,500 selected merchants in the city.

In addition, winners cannot transfer their red packets to a third party, neither can the free money be redeemed to their bank accounts. Failure to use up their red packets with the spending period would cause the Shenzhen authorities to take back the money.

Apart from testing China’s CBDC among residents, the report also noted that the red packet distribution initiative is a way to make residents stay in Shenzhen during the Spring festival. The method would help contain the spread of the coronavirus pandemic.

CBDC Trials Ongoing in Chinese Cities

Shenzhen’s digital yuan trials started with a lottery program in the Luohu district back in October 2020, and another event in the Futian district earlier in January 2021. Suzhou, another Chinese city, also carried out a red packet event back in December 2020. Between Shenzhen and Suzhou, there have been four digital test efforts in China.

As reported by BTCManager in January, the Agricultural bank of China launched digital yuan ATMs in the country. The ATMs would help enable citizens to convert their cash to digital yuan and vise versa.

Anthonia Isichei

A graduate of English, She stumbled on cryptocurrency while trying to proofread an article for a friend back in 2011, and since then, She has been hooked! She loves to play word games and tennis.