Beijing to put $ 6.2 million on trial

Beijing to put $ 6.2 million on trial

A red packet of digital Chinese currency is seen on a cell phone in a photo arranged as Chengdu City begins distributing 200,000 E-CNY “red packets” worth 40 million yuan on February 24, 2021 in Yichang , in the Chinese province of Hubei.

VCG | China Visual Group | Getty Images

GUANGZHOU, China – China will distribute 40 million renminbi ($ 6.2 million) of its digital currency to citizens of Beijing 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 in the lottery, according to the local Beijing Financial Administration and Supervision Bureau.

Each envelope contains 200 yuan (approximately $ 31) of digital currency which can be spent at selected merchants. The registration deadline is June 7 midnight.

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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 therefore “decentralized”.

Instead, China’s efforts are an example of central bank digital currency (CBDC), and the PBOC aims to digitize banknotes and coins in circulation.

In April, PBOC Deputy Governor Li reaffirmed that the digital yuan was for home use, not an attempt to challenge the dominance of the US dollar.

“For the internationalization of the renminbi, we have said many times that this is a natural process and that 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 continued digital yuan testing comes as authorities renew crackdowns on the country’s cryptocurrency industry. While local cryptocurrency exchanges were banned in 2017, regulators are now turn their attention to cracking down on bitcoin mining.

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