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200,000 Beijing residents will be eligible to win a “red envelope” holding 200 yuan in China’s central bank digital money.
China’s capital city of Beijing will hold a lottery for residents with a total prize pool of 40 million renminbi ($6.2 million). The winnings will be distributed using the country’s upcoming central bank digital currency (CDBC), Reuters reported today.
According to the article, the Beijing Local Financial Supervision and Administration Bureau has stated that 200,000 so-called digital “red envelopes” will be distributed to citizens of the city later this month. Red envelopes are a Chinese tradition in which actual red envelopes containing money are distributed throughout the Chinese holiday season.
Each envelope will contain 200 yuan (about $31) in digital yuan—officially known as Digital Currency Electronic Payment (DCEP).
Residents of Beijing have until June 7 at midnight to register for the lottery. The winners will be revealed in a few days. They may collect their winnings using two banking applications and then spend the money at participating retailers.
China outpacing peers in digital currency race
The latest lottery—already the third of its kind—is part of its CBDC effort, which first began in 2014. Ultimately, China aims to become the first major economy to launch its own digital currency.
However, the People’s Bank of China has no plans to use its digital currency to replace U.S. dollars. The country aims to implement the CBDC for domestic use only, the bank’s deputy governor Li Bo reiterated last month.
“For the internationalization of the renminbi, we have said many times that it’s a natural process, and our goal is not to replace the U.S. dollar or any other international currency. I think our goal is to allow the market to choose and to facilitate international trade and investment,” Li explained at the time.
Last October, the Chinese innovation capital Shenzhen held a similar lottery. Authorities handed more than 10 million yuan (about $1.5 million) to 50,000 people at the time. The prise money may be spent at 3,389 shops, including restaurants, supermarkets, petrol stations, metro stations, department stores, and companies.
Six Chinese banks—the Bank of Communications, Postal Savings Bank of China, Industrial and Commercial Bank of China, China Construction Bank, Agricultural Bank of China, and Bank of China—offered its consumers the chance to apply for a digital yuan wallet in late March.
China’s digital currency project is far ahead of other global powers, but that may soon change. The European Central Bank today urged other countries to develop a similar offering or else be outpaced.