Programs to pilot and encourage widespread adoption of China's central bank digital currency, known as Digital Currency Electronic Payment or the digital yuan, are continuing apace.
As a New Year's offering, the city of Shenzhen is offering its residents the option to register to take part in a municipal lottery, as of last week Friday, with registrations closing this morning, Monday, at 10 am local time. Those interested were able to sign up for the lottery using the iShenzhen event registration platform, according to an announcement by the Shenzhen government. The lottery is, strictly speaking, not a competition but is being settled on a first-come, first-serve basis.
In total, the city plans to give 100,000 "red envelopes" to lottery winners, each containing 200 digital yuan (roughly $31). The envelopes' combined value is estimated at roughly $3 million, and recipients will be able to spend their gifted currency across 10,000 supported merchants. The envelopes will only be active for just 10 days, after which the currency will expire.
To spend their currency, lottery winners will need to download and install an app and open a personal digital wallet, having earlier provided their resident ID cards and mobile phone numbers for registration.
As previously reported, China's highly anticipated digital currency had already been used in over 4 million transactions by November 2020, totaling more than 2 billion yuan ($299 million) in value. Pilots have been ongoing since April 2020, with early trials focused on major cities such as Shenzhen, Chengdu, Suzhou and Xiongan.
The digital yuan's unveiling has drawn public officials and reporters to analyze its potential geopolitical implications and its potential impact on a global financial system that continues to pivot around the U.S. dollar as the global reserve currency. In mid-December 2020, the South China Morning Post cited Zhou Xiaochuan, president of the Chinese Finance Association and former People's Bank of China governor, who argued that the DCEP does not intend to replace global fiat currencies such as the U.S. dollar or the euro.