China’s Shenzhen district will distribute 30 million digital yuan via red envelopes through a lottery program in a bid to boost the local economy affected by lockdowns.
Shenzhen Municipal Bureau of Commerce is cooperating with several banks to issue red envelopes which can be used both online and offline. The total sum of these envelopes amounts to $4.5 million.
The envelopes will be distributed through a lottery process. Each participant can win 88, 100, or 128 digital yuan. The Shenzhen municipal department is working with the Bank of China, Agricultural Bank of China, ICBC, China Construction Bank, Bank of Communications, Postal Savings Bank of China, China Merchants Bank, and WeChat. The envelopes will be distributed from May 30.
The airdrop is a bid to boost the local economy which has been battered by the recent lockdowns due to a surge in COVID-19 cases. Other districts are also working on similar releases, with the Nansha District in Guangzhou offering 10 million in digital yuan to support the catering and retail industries.
There has been much discussion, both internationally and within China, about the effects of the lockdown on the local economy. Citizens have been shaken by the sudden introduction of the restrictions, and several videos have shown citizens displaying their anger.
China blockchain tech met with suspicion
China’s experiments with its central bank digital currency (CBDC) seem to be making good progress. The country has already launched multiple pilots, and the asset is used in several districts. Meanwhile, bitcoin and crypto have been banned, though one high court ruled that bitcoin was protected under Chinese law.
However, there has been concern surrounding China’s blockchain developments. A United States bill is seeking to ban the digital yuan from app stores, citing national and economic security reasons.
Others are expressing concern over China’s Blockchain-based Service Network (BSN).
Japan, meanwhile, said that it would model its CBDC after Sweden, not China. Many are treating China’s developments with caution, believing that there are risks to national security.
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