China’s $6.2M Lottery Program in Beijing Targets Retail Transactions To Replace Crypto - TCR

• China’s latest CDBC-focused pilot program in Beijing will hand out 200,000 prizes worth 200 digital yuan each through a lottery system
• The $6.25M lottery program is conventional testing in the research and development of their digital currency
• This is China’s latest approach targeting retail transactions to widen CDBC adoption and simultaneously marginalize cryptocurrency completely

Leading the global race to launch central bank digital currency (CBDC), China has already launched its pilot projects and is very close to deploying digital yuan. Ramping up the pilots, the East Asian country is conducting a lottery program distributing 40 million yuan ($6.25 million) in digital currency to the lucky citizens.

Beijing’s Digital RMB Lottery Program

The Beijing Local Financial Supervision and Administration Bureau recently announced the digital renminbi (RMB) pilot program, reported CNBC. Under this, the People’s Republic of China will hand out 200,000 digital red envelopes containing 200 digital yuan ($31.27) each. The lottery winners will have to download and create online wallets on the digital RMB application, where they’ll receive their prize.

The Beijing residents can sign up for the lottery program through the Bank of China (BOC) and Industrial and Commercial Bank of China (ICBC) mobile applications from June 5 to 7. The money won could then be spent at nearly 2,000 merchants from June 11 through 20.

CDBC Pilot Projects To Replace Cryptos

This pilot program is a part of the research and development of digital RMB, an approach towards wider adoption of their CDBC at the expense of cryptocurrencies.

However, the Beijing program isn’t the nation’s first such trial. In February, Chengdu, the city and capital of Sichuan province, gave out digital yuan worth $6 million to its citizens. The central bank has conducted similar CBDC pilots across major cities, like Shenzhen, Suzhou, and Hangzhou. With payment services replacing cash in most consumer transactions, the move signifies China’s drive to focus on retail transactions to familiarize its population with CDBCs and marginalize cryptocurrency completely.

China’s Leads The Global CDBC Launch Race

Last month, the China Internet Finance Association (NIFA), China Banking Association (CBA), and Payment & Clearing Association of China (PCAC) issued a statement banning financial institutions from providing crypto-related services. Meanwhile, the People’s Bank of China (PBoC) announced a merger with Ant and Tencent to develop their CDBC, giving fiat (yuan) the potential to be widely distributed and used in mobile payments. 

China was the first major economy to start exploring its own digital currency in 2014. And although it’s yet to be launched officially, their digital currency tech has already been tested in major cities, including Beijing, Shanghai, and Shenzhen. In March, China proposed global rules on CDBC operations that also cover interoperability among different CDBC systems.