China is looking to continue establishing its financial capabilities globally by extending the number of lottery winners using its central bank digital currency, the digital yuan.
The central bank digital currency, or CBDC, is a permissioned, state-run cryptocurrency that allows China to track the spending habits of its yuan users. It can also adjust inflation rates and even block citizens from accessing their accounts.
In a world where many countries face extreme financial instability, the digital yuan acts as a somewhat easily accessible intermediary currency. Although the introduction of the digital yuan gives China a lot more control over its users, it is nevertheless being widely adopted.
In the latest initiative to increase adoption and normalize the CBDC, Chinese authorities have arranged a lottery for citizens from certain towns, giving them the chance to earn free digital currency.
According to an official announcement from the Shenzhen Government, a city in China with a population of 12 million people, citizens are eligible to sign up for a municipal lottery reward.
The lottery was available on a government-run app for three days with registration officially closing today.
100,000 Yuan Winners
The city will choose 100,000 lottery winners, each of which will receive 200 digital yuan, worth a little over $30. The Chinese Government will likely continue promoting these lotteries in cities across the country. This one, in particular, cost slightly over $3 million.
One perhaps disturbing aspect of Chinese digital fiat is the ability of network administrators to control certain outcomes.
Lucky lottery winners can spend digital yuan winnings at 10,000 preregistered merchants, but they’ll only have ten days to do so before the winnings are no longer active.
One of the Government’s goals for the CBDC appears to be to make it widely accessible and compete globally against other dominant currencies, like the US dollar.
Since all users will need to interact with the digital yuan via a compatible wallet, it may appeal to citizens of other countries looking for a better store of value. Whether or not this plays out, though, is still largely unproven.
The digital yuan is already widely adopted in China, with over four million individual transactions at the end of November 2020. The value transacted equates to more than two billion yuan, approximately $300 million.