Suzhou to pilot digital yuan distribution through red packets

On December 12, the authorities of the Chinese city of Suzhou will distribute the digital yuan among its residents. The lottery in the form of “red envelopes” will be timed to the year-end sale season, The Block reports, citing local media.

Rumors of such plans first surfaced in December 2019. In April 2020, the People’s Bank of China confirmed the launch of tests of the digital yuan (Digital Currency Electronic Payment, DCEP) in four cities, including Suzhou. It was reported that 19 shops and restaurants would participate, including outlets of McDonald’s and Starbucks.

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The distribution of the digital yuan in Suzhou will mirror Shenzhen’s experience, where its holders became 50,000 residents of the city. At that time, the lottery winners received 200 yuan ($29.50), which had to be spent at 3,389 locations by October 18.

A novelty will be the ability to transact without internet access. This will be possible with a simple tap of NFC-enabled smartphones with wallets installed.

The publication suggests that soon similar testing will be conducted by the authorities of another Chinese city, Chengdu. This may be indicated by advertising for the ‘internal test wallet’ feature in a mobile app for city residents, launched by one of the country’s largest banks, the Industrial and Commercial Bank of China.

In late October, Huawei presented the Mate 40 smartphone with a built-in hardware wallet for the central bank’s digital currency.

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