China to Hand Out $6.2M in Digital Currency to Beijing Residents by Lottery

by Emily on June 5, 2021

in Cryptocurrency, Tech News

The People’s Republic of China will be handing out 40 million renminbi ($6.2 million) of its digital currency to Beijing residents via a lottery.

Citizens of the Chinese capital may use two banking apps in order to apply to win one of the 200,000 so-called “Ang Pao” or red envelopes as part of the lottery, according to the bureau of Beijing Local Financial Supervision and Administration.

Each envelope contains 200 yuan (approx. $31) of the digital currency which can be used to buy from selected merchants. The deadline for registration is midnight on June 7th.

The second biggest economy in the world has yet to make a nationwide rollout of the digital yuan, which it has been developing since 2014, but it is instead more focused right now on trials in the form of lotteries country-wide.

In February, the southwest Chinese city of Chengdu gave out 40.2 million yuan of the digital currency. Last year, other cities like the Chinese tech hub of Shenzhen held their own lotteries.

Deputy Governor of the People’s Bank of China (PBOC) Li Bo said back in April that the central bank would expand the scope of its pilot projects and may even let foreign visitors at the 2022 Beijing Winter Olympics to use it. Li also reiterated that the digital yuan was only meant for domestic use and not an attempt to challenge the dominance of the US dollar.

Li said, “For the internationalization of 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.”

The digital yuan is not actually considered a cryptocurrency like Bitcoin. One big difference is that it is issued by a central authority, the PBOC, while bitcoin is not and thus “decentralized”.

Issued and controlled by its central bank, the digital yuan is an example of a central bank digital currency (CBDC) and that the PBOC is aiming to digitalize bank notes and coins in circulation.

The continued testing of the digital yuan by China comes as authorities renew a crackdown on the cryptocurrency sector in the country. After local cryptocurrency exchanges were banned in 2017, regulators are now turning their attention to cracking down on bitcoin mining.

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