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- China organises extra curricular activities to boost CBDCs adoption.
- Senior ruling party official says CBDCs adoption is decreasing.
Over 180 million yuan worth $26.6 million were distributed in several Chinese cities to promote the use case of digital yuan throughout the country during the spring festival holiday.
The People’s Bank of China, China’s central bank, started the research of developing the Central bank digital currency in 2014 under the leadership of governor Zhou Xiaochuan. After six years of hard work, e-CNY was launched in 2020.
It was the first spring festival golden week holiday after the government loosened the rules and regulations. On this occasion, local governments of many cities distributed coupons in the form of digital yuan to boost consumption.
Jinan and Lianyungang are provinces in East China popularly known for their spring tourism-issued digital yuan coupons during the holiday. The issuance of digital yuan was done by organizing different types of giveaways and other activities.
Shenzhen, a province in South China, Guangdong used digital yuan to subsidize businesses to boost recovery, which handed out 100 million yuan to subsidize the catering industry in the form of digital yuan.
According to a domestic news website, thepaper.cn it is important to note that around 200 digital yuan activities were organised during the spring festival across China; the activities were worth more than 180 million yuan.
Institutional companies also participated in the promotion events of digital yuan; their activities were more diversified, covering mobile communications, supermarkets, transportation, tourism and other sectors.
Consumers in China have shown keen interest in adopting the increasing use of the digital yuan.
Earlier in December, an ex-Chinese banker said the results of the e-CNY trial are not impressive, and the use cases are decreasing rapidly, or the ones using have been inactive for a long time.
Starting January 2023 wallet application received an update noting that users can now make contactless payments using android phones even if their devices are not connected to the internet and power.
In the second half of December 2022, China introduced a bid to attract new users. The e-CNY wallet application introduced the ability to send “red packets,” called Hongbao in China, which is used for gifting money around the holidays.
A senior ruling party official in Suzhou set a tentative key performance indicator on February 1 for the end of 2023 to have $300 billion, around 2 trillion yuan worth of e-CNY transactions in the city.
The Chinese government has been working since last month to make citizens aware of the usage of CBDCs.
China was one of the first countries to launch its Central Bank Digital Currency. Several other countries have developed their digital currencies or are working on developing CBDCs.
Predictably, in upcoming years, the usage of CBDCs will definitely increase due to several benefits it brings. It can provide a new way to make payments and diversify payment options, particularly e-commerce.
The usage of CBDCs will allow the consumer to use the central bank directly, and the biggest drawback of using CBDCs is that it will lessen the privacy offered to users.
Nancy J. Allen is a crypto enthusiast, with a major in macroeconomics and minor in business statistics. She believes that cryptocurrencies inspire people to be their own banks, and step aside from traditional monetary exchange systems. She is also intrigued by blockchain technology and its functioning. She frequently researches, and posts content on the top altcoins, their theoretical working principles and technical price predictions.
