Shenzhen to hand out 10 million digital yuan in currency giveaway

China is promoting its central bank digital currency with a public $1.5 million giveaway.

The major Chinese city of Shenzhen is launching a pilot program to promote the digital yuan with a public giveaway.

In collaboration with the country's central bank, Shenzhen is planning to distribute a total of 10 million digital yuan ($1.5 million) — China’s central bank digital currency, local news agency Sina Finance reports Oct. 9.

As reported, the giveaway pilot will be funded by Shenzhen's Luohu District. The giveaway money will be reportedly distributed to 50,000 recipients through a lottery. Shenzhen residents can start applying online to participate in the giveaway on Oct. 9.

According to the report, each “gift” will be worth 200 renminbi and can be spent starting from Oct. 12 and Oct. 18 at any of 3,389 merchants in Shenzhen's Luohu District. According to the rules of use, the gift money cannot be transferred to another person or redeemed in one’s own bank account, the report notes. The unused amount will be reportedly taken back from winners after Oct. 18 if it is not spent.

The new pilot is part of the Chinese government’s plans to promote the digital yuan to the public. Also known as the digital currency electronic payment, or DCEP, the digital yuan project piloted in China in April 2020. As reported by Cointelegraph, it is currently being tested in nine cities including Shenzhen, Guangzhou, as well as Hong Kong and Macau.

China's CBDC pilots seem to be progressing apace. On Oct. 5, PBoC’s deputy governor Fan Yifei announced that DCEP wallets processed 1.1 billion renminbi ($162 million) in transactions between April and August 2020. According to the official, China’s central bank opened 113,300 personal digital wallets and 8,859 corporate digital wallets within the digital yuan initiative.