China’s digital Yuan tested through a lottery worth $1.5 million

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China hosts a lottery to test its latest digital currency, the digital Yuan. The lottery is worth about $1.5 million.

The government in Shenzhen carried out a lottery, giving away 10 million Yuan worth of digital currency. This currency is about $1.5 million in the form of China’s latest digital currency.

Digital currency – Yuan

It is officially known as the Digital Currency Electronic Payment (DCEP). However, the Luohu district funded Digital Yuan or DCEP, as per a statement from the government.

Meanwhile, a subsidiary branch of China’s central bank called the Digital Currency Research Institute invited state-owned commercial banks to design a custom-built digital currency. With that said, China can enact as a leading innovator in the digital economy field.

However, DCEP is NOT a traditional cryptocurrency like Bitcoin. While on the one hand, the Bitcoin uses distributed ledger technology (DLT) to store and record the digital coin ownership data.

On the other hand, Digital Yuan or DCEP is under the control of the People’s Bank Of China.

If we further compare the two, Bitcoin, unlike the Digital Yuan, is decentralized, meaning no single entity controls Bitcoin. At the same time, Digital Yuan is under the control of the central bank.

Nevertheless, the central banks worldwide have been trying to issue digital currencies for some time.

The Bank of International Statements and seven central banks announced the structure for Central Bank Digital Currencies (CBDCs) last week.

The Lottery

The government of Shenzhen carried out a lottery last week. The lottery was giving away 10 million Yuan worth of money in the form of their latest digital currency. Its value in USD is around $1.5 million.

According to a CNBC report, about two million people applied for the lottery, and many won. The number of winners was around 50,000.

Although there have been only a few trials across the whole country, the Shenzhen lottery is so far the largest trial of China’s digital currency.

The lottery winners have to download a digital application named the Renminbi app to receive the digital yuan, China’s new digital currency. They can spend that money over 3,000 merchants.

However, they can only spend those in the particular district of Shenzhen.

Further, according to the report, there were some big merchants among the participants. This includes Walmart, as far as a post by the Shenzhen government messaging app WeChat is considered.

China has been showing ambitions towards a cashless civilization. The latest Chinese digital currency can be a massive step in developing digital currency.

Image courtesy of Niphon Subsri/Shutterstock

Ritick Raj

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Ritick Raj

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