China Gives $6.2M In Latest Digital Currency Trial

Beijing, the capital of China, is holding a raffle for residents with a total prize pool of 40 million renminbi ($6.2 million). Profits will be distributed using the central bank's emerging digital currency (CDBC), Reuters reported today. According to the report, Beijing's Local Financial Supervision and Administration Bureau announced a total of 200,000 so-called digital "red envelopes" to residents of the capital late this month. Red envelopes are a Chinese tradition where real red money envelopes are usually handed out during the holiday season in China. Each envelope contains 200 yuan (about $31) in digital yuan format, officially called Digital Currency Electronic Payment (DCEP). Beijing residents have until midnight on June 7 to register for the lottery. Winners will be announced in a few days. They can claim their rewards through two banking apps and then spend the money at specific merchants. The latest lottery – already the third of its kind – is part of a CBDC effort that began in 2014. As a result, China aims to become the first major economy to launch its own digital currency. However, the People's Bank of China has no plans to use the digital currency instead of the US dollar. Li Bo, the bank's vice president, reiterated last month that the country wants to implement CBDC for domestic use only. Before the internationalization of the renminbi, we have often said that this is a natural process, and our aim is not to replace the US dollar or any other international currency. “I think our goal is to let the market choose and facilitate international trade and investment,” he said. Chinese tech hub Shenzhen held a similar lottery last October. At that time, authorities distributed more than 10 million yuan (about $1.5 million) to 50,000 residents. The winners were able to spend their prizes in 3,389 stores such as restaurants, supermarkets, cafeterias.

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