The southwestern Chinese city of Chengdu will give out over $6 million in the latest test drive of the central bank’s digital currency, CNBC reported. Earlier this month, China’s central bank said it was handing out $1.5 million in digital yuan to 50,000 Beijing residents.
China has plunged into the global race to launch central bank digital currencies, conducting tests in such major cities as Shenzhen, Suzhou and Hangzhou. The move comes as payments services have replaced cash in many of China’s consumer transactions.
China’s central bank, the People’s Bank of China, is upping the ante in Chengdu, where its test is four times larger than that in Beijing. In the nation’s capital, participants needed to have a Chinese government identification number or residency permit from Hong Kong, Macao, or Taiwan to qualify for the currency packets.
Chengdu announced Tuesday (Feb 23) that locals could join a lottery Wednesday and Thursday (Feb. 24 and 25) for one of the roughly 200,000 vouchers. CNBC said the vouchers are worth about $27 to $37 each. The new test drive will be worth about $6.2 million.
As with the Beijing giveaway, the Chengdu test drive is tied to the Lunar New Year. Lottery winners can use the vouchers from March 3 to 19, according to the city’s announcement.
Over the last few years, mobile payments have replaced the use of cash for many Chinese consumers. Instead, people are increasingly using large payments services such as Ant Group’s Alipay and Tencent’s WeChat Pay.
This week, China’s central bank said it also planned to work with Ant’s MYBank and Tencent-backed WeBank. Previously, testing involved state-owned banks, not privately owned ones.
The digital currency that China is testing is expected to work similarly to the Chinese payment apps, CNBC reported. In contrast to bitcoin, which operates in a decentralized manner, the digital yuan would be run by the country’s central bank. (Source: pymnts.com)