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China Disburses Digital Yuan to Citizens to Boost The Economy

The Chinese province of Shenzhen plans to distribute 30 million digital yuan (eCNY), or approximately $4.5 million, to its residents. A local news outlet reported this news earlier today, noting that the government plans to distribute the funds in the form of red packets.

According to the report, the province has partnered with eight banks in this initiative. They include Bank of China, Agricultural Bank of China, Industrial and Commercial Bank of China, and China Construction Bank. The rest include Bank of Communications, Postal Savings Bank of China, China Merchants Bank, and Weizhong.

To ensure both the online and offline population gets a fair chance, the Shenzhen Municipal Bureau of Commerce and its partners will offer the red packets in the form of a lottery. Shenzhen companies will offer the digital yuan through the Meituan platform.

The lottery will offer residents a chance to win 88, 100, and 128 digital yuan red packets. With these funds, the province seeks to restart its economy following multiple COVID-19 lockdowns. The provincial governments plan to start disbursing the funds starting Thursday, June 2.

China’s Plans to Revive the Economy See It Issue 60M More Digital Yuan

The Nansha District in Guangzhou said it would offer its residents 10 million yuan in digital yuan red packets. This offering seeks to boost the catering and retail industries. However, the district has not yet announced the official date of the issue.

Additionally, the Xiong’an New Area, a special economic zone southwest of Beijing started distributing red packets today as part of its 50 million yuan plan to boost consumption.

This news comes as the Chinese government continues full steam ahead with its plans to launch a digital yuan. However, the government is yet to announce when it plans to launch its central bank digital currency (CBDC).

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Although eCNY is yet to go live, US senators have already introduced a bill looking to bar companies that operate app stores from listing applications that support payments in eCNY. According to the senators, the digital yuan could expose Americans to privacy and security risks.

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