China trials digital yuan by giving away $1.5M worth of it

Spread the love

Central bank of China is issuing 10 million yuan ($1.5 million) worth of digital currency to 50,000 people selected by lottery in the country’s first trial run of a cashless payments system, according to several reports on Monday (Oct. 12).
Approximately 2 million people applied to the Shenzhen drawing. The winners were selected at random and announced on Sunday. They will receive a digital red packet that can be downloaded using the official Renminbi application that only the winners can access to. The money can be used Oct. 12-18 at more than 3,000 designated shops in the Luohu shopping district in Shenzhen.
Unlike bitcoin, the digital yuan is not a cryptocurrency as it is being issued and controlled by China’s central bank, the People’s Bank of China (PBOC). It is considered to be a digital version of the nation’s currency. It won’t replace Alipay or WeChat Pay and meant to work with them as well as other banks.
In comparison, Bitcoin is decentralized, meaning it’s not owned and controlled by one entity, and it is not distributed by a central bank.
The Renminbi application is not yet available for public download. Public access was cut off in August after a soft launch got massive attention.
The lottery for the digital yuan — officially known as the Digital Currency Electronic Payment (DCEP) — was initially funded by the Luohu district, according to a government statement. In August, PBOC first announced it would begin testing the digital currency.
Last week, the Bank for International Settlements and seven central banks  — such as the European Central Bank, the Swiss National Bank and Bank of Japan  — started hammering out a framework for digital currency.
Facebook’s plan last year for the stablecoin libra resulted in central banks stepping up plans for an electronic currency. A May BIS survey of 66 central banks showed that 80 percent of them are working on CBDCs.

Leave a Reply

Your email address will not be published.