Shenzhen gives away free 30M digital yuan to attract consumer spending

Shenzhen, a city in the Guangdong Province of China, is carrying out an airdrop of 30 million digital yuan worth around $4.5 million. The giveaway is intended to stimulate consumer spending in the local economy. 

In a press release, the authorities of the tech-centric city reveal that the airdrop is a joint effort with food delivery app Meituan Dianping. Residents of the city can register on the app to get coupons for raffles that will determine beneficiaries of the airdrop. 

“As an important part of a series of activities and policies to promote consumption, Shenzhen will issue digital RMB red envelopes through the Meituan platform, covering a large number of offline merchants in Shenzhen, as well as various consumption scenarios of food, clothing, housing and transportation on the Meituan platform,” the release said. 

There is a chance to win 88, 100, or 128 digital yuan, and participants can spend the money at over 15,000 online or offline shops authorized to process e-CNY transactions. The Shenzhen Municipal Bureau of Commerce will cooperate with several major banks for the distribution.

Shenzen has previously carried out a similar distribution of $2.3 million. The city is also one of the locations where the People’s Bank of China (PBoC) is trialing the payment of taxes and charges with the e-CNY. 

China continues expanding CBDC pilot scheme 

Shenzhen is not the only city that has been implementing the e-CNY “red envelope” drops. CN Stock, a local news outlet, reports that from January to April, over 3.4 billion yuan worth of e-CNY has been distributed in about 20 provinces to help stimulate spending in the COVID-19 lockdown inhibited economy. 

As noted by Reuters, the scheme is also part of the PBoC’s plan to encourage payments using the CBDC platform. So far, the central bank has onboarded more than 10 pilot cities and plans to add more. 

Transactions with e-CNY have also surpassed RMB87.6 billion, with over 261 million wallets at the end of 2021. The PBoC is also actively expanding the e-CNY pilot scheme on the international scene. 

Previously, China had conducted a joint pilot scheme of its CBDC with Singapore. It also planned to trial the CBDC at the Beijing Winter Olympics to gain more international traction, but was thwarted by COVID-19 restrictions. 

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