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Chengdu to distribute $7.7 million in its first digital yuan lottery: report

Digital yuan app

Chengdu will distribute $7.7 million to winners of its first digital yuan lottery on Jan. 27, on the heels of similar trials for the currency in Shenzhen and Suzhou.

Why it matters: The lottery is the third digital currency trial open to the public, signaling that rollout is underway. It is also the biggest: Chengdu is giving out more than double the amount of funds distributed in each of the previous lotteries.

  • China’s digital yuan is likely to be the first digital currency issued by the central bank of a major economy.

READ MORE: EXCLUSIVE: We got some digital yuan!

Details: The trial will start on Jan. 27 and will last until Feb. 26, Chinese media reported. Residents of Chengdu, the capital of southwestern Sichuan province, can enter the lucky draw via a local government application. The RMB 50 million ($7.7 million) in funds will be distributed in red envelopes.

  • Unlike other lotteries, the Chengdu red envelopes will be earmarked for use online or offline. RMB 30 million can be used in offline stores, and the remaining RMB 20 million can be spent on e-commerce site

Context: The lotteries distribute the digital currency and usually set a time limit for when it can be used so that the relevant authorities can gather and study data from the trial.

  • Shenzhen has held two lotteries, one in October and the second in January, while another took place in Suzhou in December. Prior to the public lotteries, the digital currency was only available to whitelisted individuals who were selected to take part in the trials held in Chengdu, Suzhou, Shenzhen, and Xiong’an.
  • In 2021, the digital currency started popping up in other places, including a cafe in Beijing and a hospital in Shanghai.
  • Chinese authorities have said that the digital yuan, also known as the Digital Currency/Electronic Payments (DCEP) project, will be tested during the Beijing 2022 Winter Olympics.

READ MORE: INSIGHTS | China’s digital currency has a long way to go

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