- 2 million Shenzen residents sign up for digital Yuan lottery
- 95% of winners have created a digital wallet and spent their prize
- Digital Yuan success is looking to challenge the American dollar
Shenzen’s trial of the Chinese central bank’s digital currency – the digital Yuan – has gone spectacularly well. Initial interest prompted two million citizens to give the digital lottery a go last week. In the end, 50,000 residents were randomly chosen to win 200 digital Yuan (30 USD) each. The pilot giveaway was on the 7th October with the requirement that winnings are to be spent by 18th October. The latest data shows a 95% uptake from winners, with 47,573 ‘red packets’ spent.
As previously reported, the digital trial requires winners to download the Renminbi app and create a digital wallet to access their winnings and spend them in specific stores in Luohu. The trial’s success validates government strategy to stimulate consumer spending via digital currency trials.
Impressively, many winners who have spent their prize have gone on to adopt the digital currency, topping up their digital wallet. These top-ups amount to over 901,000 Yuan (134,000 USD), a staggering feat for a pilot.
Digital Yuan and the Chinese economy
The Chinese economy needs boosting this year, following its first economic contraction since 1992. Financiers will undoubtedly be watching the next stages in the digital Yuan rollout closely.
The pilot program is due to roll out in Hong Kong, Guangzhou, Macau, Zhuhai, and other Hong Kong bay regions by the end of 2020. This aligns with the government’s intention to have a closely monitored, cashless society. The digital Yuan is not a cryptocurrency but issued and backed by the People’s Bank of China. It is set to be the first fully operational digital currency on a national scale.
Some are seeing the results as a litmus test with success showing the digital Yuan to be an increasing challenger to the dollar, rather than cryptocurrencies like Bitcoin. Unlike many other global economies, China has seen third-quarter economic growth of 4.9%. If Shenzen is representative of the Hong Kong bay area, the digital lottery will further incentivize consumer spending, boosting recovery.