China’s capital city of Beijing has launched booking channels for the trial of the central bank-backed digital yuan on Sunday, dispensing 10 million yuan ($1.55 million) via online “red packets” to residents in Beijing to shore up local consumption and encourage migrant workers to stay put in the city for the upcoming Spring Festival holiday.
A total of 50,000 digital red packets, each containing 200 yuan, will be issued to Beijing residents on a lottery basis starting on Wednesday, according to a statement posted on the local financial regulator’s official WeChat account.
The trial, coming at a time when the Beijing 2022 Winter Olympics countdown approaches 365 days, is named “digital Wangfujing, ice and snow shopping festival.”
The booking channel will be open from Sunday to Monday, and the recipients of the “red packets” will be able to use them from Wednesday to February 17. The digital yuan can be used at more than 100 designated physical stores in the Wangfujing commercial circle or through online e-commerce platform JD.com.
According to the statement, the shopping festival aims to support offline and online consumption of digital yuan in winter sports and all scenarios surrounding 2022 Beijing Olympic Games, including dining, accommodation, transportation, travelling, shopping and entertainment. It is part of ongoing testing during the digital yuan’s development process.
Analysts said the trial will pave the way for the digital yuan’s broader use and globalization. “The previous tests target Chinese residents’ ordinary payment scenarios, but as flocks of foreigners will come to the Olympics, it will be a great time then for the country to promote its digital currency, enabling foreigners to register and use it,” Wang Peng, an assistant professor at the Gaoling School of Artificial Intelligence at the Renmin University of China, told the Global Times on Sunday.
In last December, Beijing launched a small-scale digital yuan trial at the subway station in Beijing Daxing International Airport. Then, users were able to purchase subway ticket using digital yuan and “swipe” ski gloves that have installed digital yuan wallets to pass the terminal.
Local resident can also receive and use the digital yuan “red packet” without the bank cards of the six Chinese commercial banks – Industrial and Commercial Bank of China, the Agricultural Bank of China, the Bank of China, China Construction Bank, and Bank of Communications, and the Postal Savings Bank of China, which have been participating in the research and development of the digital currency project, the statement said.
For the next step, the local financial regulator of Beijing says it will steadily promote more trial applications of the digital yuan surrounding the Beijing 2022 Winter Olympics, improving the building of demonstration zones for the application of digital currency and other fintech, and striving to build a good payment environment for the Games.
The trial will also make Beijing the third Chinese city after Shenzhen, and Suzhou, East China’s Jiangsu Province, to launch open trial applications of the digital currency. So far, more than 100 million yuan’s worth of digital red packets have been distributed.
Observers say that the digital yuan’s trial will be run in additional retail scenarios, such as e-commerce and short video. In the future, it will also run tests in real economy applications, such as trade, finance and supply chain.
The trial is also expected to be launched in more cities across China, such as Shanghai, Changsha, capital of East China’s Hunan Province, and Hainan Province this year, sources revealed,
Residents who received “red packets” of digital RMB use the money in stores in Shenzhen, South China’s Guangdong Province. The city launched a pilot program to distribute 10m yuan ($1.49m) in the form of digital currency to residents. Photo: Li Hao/GT
