China wants to introduce a digital currency in its country, and to start the movement, it is giving away 10 million yuan (1.3 million euros) to some citizens.
The state-run People’s Bank of China gave 50,000 randomly selected citizens a voucher of about € 25 to spend at about 3,300 designated retailers in Shenzhen’s Luohu district (can only be spent Monday through Friday, at a same week, in 3,389 stores in Luohu that have installed the digital currency payment system). The idea is to not only test the technology involved, but also to boost consumer spending in the wake of the COVID-19 pandemic.
Winners must download a digital application to receive digital money, then they can buy products at local pharmacies, supermarkets and even Walmart.
Testing of the digital yuan started last April (previous tests were mainly carried out among the government, financial agencies and businesses). At that time, a pilot program was run with several companies, including US companies such as McDonald’s and Subway. However, unlike decentralized cryptocurrencies like bitcoin, China’s digital currency will be controlled by the country’s central bank. The electronic monetary payment system had been tested in almost every field related to people’s livelihoods, including paying bills for water, gas and electricity, government services, and transportation. In total, more than 3.12 million transactions have been made with more than 1.1 billion digital yuan.
The goal is to reach a cashless society, with the idea that digital currencies can be more easily controlled and monitored than cash or bitcoin-like cryptocurrencies.
It is not the only country with this mindset, the Bank of Japan has just announced plans to start experiments with digital currency, although it has not yet released specific details.
More information on China Daily.
