Dragon Boat Festival’s popularity bodes well for China’s digital currency
After winning an award in Beijing’s renminbi (RMB) digital lottery program, Tao Siyu was eager to invite his friends over to a festive meal.
“I didn’t win a digital RMB red envelope in February and felt sad that I missed a chance to experience (the new payment system),” Tao said, paying the bill with the money. luck. “Once I was informed that I was a winner this time around, I invited my friends over to dinner and share in the joy.”
In China’s latest digital legal tender public trial, the Chinese capital Beijing, with a population of approximately 22 million, distributed 40 million yuan ($ 6.25 million) in digital currency to consumers in a total of 200,000 digital red envelopes, each containing 200 yuan.
The raffle results were announced on June 11, the day before the Dragon Boat Festival’s three-day vacation, as a boom in travel and spending was expected during the festival. The digital yuan can be used in nearly 2,000 businesses around Beijing, indicating wider reception.
Lottery winners will need to download the digital RMB mobile app to get the wallets online. They are expected to spend the money from June 11 at 9 a.m. to June 20.
In February, Beijing City began with 10 million yuan in digital yuan gifts to local residents in an effort to boost consumption during the Spring Festival holidays. These gifts were also distributed via a virtual red envelope lottery, or “hongbao,” a traditional Chinese practice of giving money.
More and more consumers are subscribing to the digital yuan, which promises to make everyday life easier and secure digital payment.
The Shanghai financial center distributed 350,000 virtual “hongbaos” before the Dragon Boat Festival. A student from Donghua University, identified by his last name as Ding, said that he and two of his roommates had all won a hongbao and tried it in the city’s busiest shopping areas.
“I saw a lot of people asking if digital RMB payment qualifies for special discounts,” Ding said.
In the ancient city of Zhujiajiao in Shanghai, a popular tourist destination, shops, including those selling the Zongzi Festival Delight, a pyramid-shaped sticky rice dumpling wrapped in reed leaves, installed signs “Pay with digital RMB”.
A merchant named Pan said that she could sell up to 4,000 zongzi per day during the Dragon Boat Festival holidays, and many orders were paid via digital yuan, conveniently and without transaction commission.
China aims to improve its domestic retail system by further developing its digital currency. Gradual steps will expand its use through testing, according to monetary authorities and country experts.
The country started piloting its digital currency in parts of the country in late 2019. The currency is expected to be issued by the country’s central bank and legally backed by the government as an alternative to paper money.
During pilot programs in cities such as Beijing, Shenzhen, and Suzhou, businesses such as grocery, basic necessities, and catering, among others, have already supported payments using the digital yuan. .
As the digital RMB pilot program expands its reach in public life, China is expected to enrich its operational experience to pave the way for large-scale adoption in small-scale and high-frequency retail scenarios, experts say. .