Shenzhen’s sovereign digital currency giveaway attracts 2 million applicants in China’s latest test of virtual yuan

A total of 50,000 digital ‘red packets’ each containing 200 yuan (US$30) were available, meaning only 2.61 per cent of applicants were successful

It is the latest in a series of trials to test and promote the new digital yuan, officially known as the Digital Currency Electronic Payment (DCEP)

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The digital yuan, officially known as the Digital Currency Electronic Payment (DCEP), is part of China’s plan to move towards a cashless society. Photo: Reuters

Published: 6:15am, 13 Oct 2020Updated: 11:33am, 13 Oct 2020

Nearly 2 million people in Shenzhen, 15 per cent of the southern technology hub’s total population, signed up to take part in the latest trial for China’s sovereign digital currency.

Distribution of a total of 50,000 digital “red packets” – gift envelopes traditionally given out during holidays and special occasions – each containing 200 yuan (US$30), began on Monday after Chinese citizens living in Shenzhen were asked to sign up between Friday and Sunday.

But with 1,913,847 people having signed up for the lottery-style giveaway, according to the local authority, only 2.61 per cent of applicants were successful.

Officials in Luohu district, Shenzhen, just across the mainland border from Hong Kong, announced the plan to distribute 10 million yuan (US$1.49 million) worth of the country’s new sovereign digital currency last week.

It is the latest in a series of trials to test and promote the new digital yuan, despite the central bank repeatedly having said that there is no timeline for the launch of the digital currency.

The red packets can be used to make purchases at 3,389 designated shops in Luohu from Monday until Sunday, but they cannot be transferred to other individuals or into a regular bank account.

It is the first time China’s central bank has specifically involved the general public in its trials for the sovereign digital currency, with previous tests largely limited to a selection of people, including bank staff from the country’s four state-owned commercial banks, as well as some public servants.