In a bid to promote digital yuan adoption, several cities in China have launched special holiday promotions employing the digital currency. Shanghai, Hangzhou, Suzhou, Changsha and Hefei are among the cities running promotional programs in which consumers receive payments in the form of the newly-launched digital yuan as gifts.
The Chinese central bank, the People’s Bank of China, launched the digital yuan in April 2020. The central bank stated its goal in issuing the digital currency was to improve financial inclusion and reduce transaction costs by eliminating the need for intermediaries. Subsequently, the digital yuan has been a topic of increasing interest.
As part of the promotional program in different cities, individuals receive random digital yuan payments from a pool provided by the local government. Participants then use the digital yuan to purchase goods and services, such as electronic appliances, daily necessities, and other discounts, to drive consumption.
In Shanghai, over one million citizens will receive digital yuan payments of up to 200 yuan ($31 US) each. Hangzhou is running a similar program, offering citizens 10 million yuan ($1.5 million US) in digital yuan.
The move by Chinese cities to boost digital yuan adoption is an indication that the government is serious about the currency and its potential for driving economic growth. With businesses and individuals now more comfortable using the digital yuan, it is expected to gain momentum in 2021.
