A red packet of Chinese digital currency is seen on a mobile phone in an arranged photograph as the city of Chengdu begins to distribute 200,000 E-CNY ‘red packets’ worth 40 million yuan on February 24, 2021 in Yichang, province. of Hubei of China.
VCG | Visual China Group | fake images
GUANGZHOU, China – China will deliver 40 million renminbi ($ 6.2 million) of its digital currency to Beijing citizens in a lottery.
Residents of the Chinese capital can use two banking apps to apply to win one of 200,000 so-called red packages as part of the lottery, according to the Beijing Local Financial Supervision and Administration Office.
Each envelope contains 200 yuan (about $ 31) of the digital currency that can be spent with selected merchants. The deadline to register is midnight on June 7.
The digital yuan is not a cryptocurrency like bitcoin. On the one hand, it is issued by a central authority, the PBOC, while bitcoin is not and is therefore “decentralized”.
Instead, China’s efforts are an example of a central bank digital currency (CBDC) and the PBOC aims to digitize banknotes and coins in circulation.
In April, People’s Bank of China Deputy Governor Li reiterated that the digital yuan was for domestic use and not an attempt to challenge the dominance of the US dollar.
“For the internationalization of the renminbi, we have said many times that it is a natural process and our goal is not to replace (the) US dollar or any other international currency,” Li said. “I think our goal is to allow the market to choose and facilitate international trade and investment.”
China’s ongoing testing of the digital yuan comes as authorities renew their crackdown on the cryptocurrency sector in the country. While local cryptocurrency exchanges were banned in 2017, regulators are now turning their attention to cracking down on bitcoin mining.