China’s Central Bank Digital Currency (CBDC), the digital yuan, is coming to shape by the day as anticipation for a public launch continues to build. While there’s no date for an official launch, the government is conducting some promotion of its own.
Drumming Up More Anticipation
Earlier this week, local news source Sina Finance reported that Shenzhen city’s government would launch a program to promote the digital yuan via a public giveaway. According to the report, the giveaway program is the brainchild of the Luohu District in Shenzhen. The city’s government is collaborating with the Peoples’ Bank of China, intending to distribute ten million digital yuan (worth about $1.5 million).
The money is expected to be evenly distributed among 50,000 recipients. All participants will have to take part in a lottery, with organizers choosing the winners at random. Applications will open today.
The report added that winners would be able to spend their “gifts” between October 12 and October 18, 2020. The Luohu District has about 3,390 merchants, and each of them will accept the digital currency within that time frame. The government has also set rules of use, explaining that winners won’t be able to redeem the digital currency into fiat or send them to others.
If a winner fails to exhaust their funds by the deadline, the government has vowed to take them back.
Shenzhen is a tech-forward city in China. It was one of the first regions where the government tested the asset, with studies dating as far back as August. At the time, local news agency the Southern Daily reported that the government had expanded the tests to include the Greater Bay Area of Hong Kong. The area is made up of nine regions, including Shenzhen.
Besides the Greater Bay Area, the Wall Street Journal has reported that other parts like Hebei, Tianjin, and Beijing have also gotten tests for the digital currency.
The Dawn of the Digital Currency
China is undoubtedly the global leader as far as CBDCs are concerned. The country has moved quickly to develop a digitized version of its asset, and it is currently holding tests at a scale that no other country is managing. For now, however, there’s no official launch date.
Many believed that the asset would launch sometime this year, but things haven’t exactly gone the government’s way. Most notable among challenges has been the coronavirus pandemic, which is affecting tests and research. Still, it is expected that the digital yuan should arrive anytime within the next three years.
China isn’t the only country making significant progress with its digitized currency. This week, the Korea Times reported that South Korea was also making quick progress towards distributing its digital won.
As the report highlighted, the Bank of Korea will launch a test for the asset next year, which will primarily involve “virtual environments.”
“The CBDC will be issued and circulated in the virtual world and we are going to test a number of transaction scenarios under a variety of circumstances,” an official at the agency confirmed.