The Chinese government is making efforts to boost the adoption of CBDCs in the country. Recently, China launched its digital yuan, called e-CNY. To boost its adoption among its citizens, China added a new feature of sending money in electronic ‘red packets’ that cover displaying traditional wishes for special occasions like birthdays, the New Year, etc.
China’s digital yuan, called e-CNY, has already made its debut last year. However, to attract more users, China’s wallet app for its CBDC has launched a new feature enabling users to send money in an electronic version of traditional ‘red packets.’
These red packets, known as ‘hongbao’ in China, are customarily used for giving money around the Chinese New Year and other celebrations as a gesture of good luck. Popular local services, such as WeChat Pay and AliPay, are offering virtual red envelopes as a result of the rising use of digital payments.
According to reports, the new feature was released over the weekend, about a month before the Chinese New Year, which is celebrated on 22 January.
The e-CNY app allows users to send a red packet to only one person, or a ‘lucky draw’ can be set up for a group of people who will get a random amount from a pool of funds, a feature quite similar to those on WeChat Pay and Alipay.
Furthermore, users can choose a packet cover displaying wishes for special occasions like birthdays, the New Year, and wishes for a ‘prosperous China.’
As per reports, the People’s Bank of China has distributed e-CNY to 15 of China’s 23 provinces to date, and it has been used in over 360 million transactions totaling $13.9 billion.
A Dec.18 report in the Chinese Workers’ Daily newspaper reported the e-CNY trails will expand to the cities of Jinan, Nanning, Fangchenggang, and Kunming. The trials previously expanded in September to four of the country’s provinces, including its most populous, Guangdong.
Despite the government’s rapid expansion of the trials, the user base of the e-CNY wallets reported in January 2022 was 261 million users set up a digital wallet.
Ahead of the 2022 Winter Olympics in Beijing, the People’s Bank of China allowed foreign tourists to use the digital yuan (e-CNY) during this grand event.
The 2022 Winter Olympics has become a coming-out party for China’s CBDC. The People’s Bank of China, China’s central bank, has been trialing the digital yuan in several areas for years now and has started allowing foreigners to use the digital currency for the first time during the event. However, the digital yuan’s availability has attracted some concerns about giving China’s government new tools to monitor its economy and control a share of the global digital economy.