Digital Yuan Users: Some Came Back for More, Others Unimpressed

Digital Yuan Users: Some Came Back for More, Others Unimpressed
(Source: Adobe/Сергей Шиманович)

A number of Chinese citizens who received digital yuan payouts worth USD 30 in a recent giveaway event have decided to top up their central bank digital currency (CBDC) wallets.

As previously reported, the central People’s Bank of China (PBoC) distributed thousands of “red envelope” lucky draw handouts to citizens in the city of Shenzhen earlier this month. And 50,000 of these held links that activated wallets at four state-owned commercial banks that have been tasked with distributing the CBDC, known in China as the Digital Currency Electronic Payment (DCEP) system.

Per an official post from the Shenzhen Municipal People's Government in conjunction with the PBoC, almost 2 million people applied to take part in the event, with winners notified by text message.

As of yesterday, USD 1.3m of the USD 1.5m given out has now been claimed – and largely spent, although some users decided to come back for more, and have used their wallets to purchase some USD 134,000 worth of the digital yuan.

Over 3,300 merchants in the city now accept the token, which is still officially in the pilot testing phase.

However, it seems that some citizens have either been too busy to claim their tokens or have lost interest: 5% of the payouts still remain unclaimed, the city’s data showed.

Meanwhile, Reuters reported that the reception in Shenzhen has been decidedly mixed, quoting one recipient as stating that they would not be using the digital yuan again unless they were given another free handout.

Others told Reuters that they did not feel it was sufficiently differentiated from existing e-pay solutions like Alipay and WeChat Pay.

However, industry experts appeared to disagree. The news agency quotes Wang Shibin, the co-founder of crypto exchange HKbitEX, as stating,

“The event last week really means that the [digital yuan] has already moved from theoretical internal testing to real-world practice.”

And a senior economist at PwC added,

“It’s especially important to offer convenience and other benefits to promote the use of the digital yuan. […] For the digital yuan to be popularly accepted, banks and other institutions need to invest heavily in applications, marketing and education.”

Learn more: Five Russian Commercial Banks Eager to Pilot Digital Ruble in 2021 Digital Yuan Testers Spent USD 52 On Average Per Transaction ECB Sends Another Confirmation of A ‘Global Currency War’ How CBDCs Might Change Our Daily Payments

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