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Shenzhen Plans Third Digital Yuan Pilot

Published: in FINTECH by .

Business could be on the precipice of an automation explosion


Shenzhen will be continuing China’s digital yuan pilot program by issuing the digital currency to citizens, according to a report from XinhuaNet.

There will be 20 million digital yuan (about $3.1 million) sent out in red envelopes for citizens to use to make purchases — and to promote the new form of currency, the report stated.

Recipients will be determined by lottery, which will be done through a random drawing, as it has been before. Those who win the drawing will be able to download a mobile app to use their currency, according to the report.

From there, recipients can use the money in more than 3,500 shopping locations designated for the pilot, which will have a digital currency transaction system ready, the report stated. The round will take place Feb. 1-9.

On Wednesday (Jan. 20), the round opened for registration among individual businesses and employees of enterprises staying in Shenzhen for the Spring Festival in the Longhua district, which funded this round, according to the report.

Fan Yifei, deputy governor of the People’s Bank of China (PBOC), said the digital yuan will be akin to legal tender, made to be treated as M0, which refers to cash in circulation like coins or banknotes, the report stated. The digital yuan will be issued by the PBOC to designated commercial banks. From there, it will be distributed to the public.

The last digital yuan trial, which took place in Suzhou and concluded in December, saw Chinese consumers spending their digital currency on retail, food delivery and ridesharing, PYMNTS reported.

Suzhou was a choice location for the digital yuan trial because of its large number of restaurants and businesses. The trial encompassed work with independent shops along with partnerships with big names like JD.com, Meituan and Didi.

The Suzhou trial also saw a new electronic payment feature implemented to let people pay for items without an internet connection.

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NEW PYMNTS DATA: RETAIL BANKING SERVICES’ PARADIGM SHIFT STUDY – JANUARY 2021 

About: The January 2021, Retail Banking Services’ Paradigm Shift Report, PYMNTS examines how consumers choose to engage with their FIs when accessing information about various products and services, especially since the pandemic’s onset.





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