China to Airdrop $30 Million of Digital Yuan to Revive Locked Down Economy

The Chinese Government is set to distribute $30 million worth of digital yuan in the Shenzhen district. The Shenzhen Municipal Bureau of Commerce, along with a local banks, is working on a plan to send out red envelopes via a sweepstakes.

A Lottery with Three Options

The COVID-19 relief lottery will have three tiers of reward: 88, 100, or 128 digital yuan (e-CNY), and the envelopes will be distributed on May 31st. The total sum of the currency being distributed through the red envelopes is $4.5 million USD. Perhaps most significantly, the awarded digital yuan will be available both online and offline.

An Attempt to Boost an Economy Stricken with Corona

The sudden lockdowns recently imposed across the country have left the Chinese economy with significant losses. To discuss how best to combat the situation, 100,000 Chinese officials attended an emergency meeting regarding the impact of COVID-19, and the damage caused to the Chinese economy.

Several videos of angry citizens have gone viral, as the strict lockdown rules have led to poverty in rural areas, while the measures in the financial hub of Shanghai have left hundreds of thousands of people unable to leave their homes for two consecutive months.

China’s People Getting Used to the CBDC

China’s native digital yuan (e-CNY) has already been rolled out in 28 districts across the country, and its adoption has spread to everyday use in public transportation, grocery shopping, online purchases and more. Despite tech-savvy Chinese citizens being quick to adapt to the local digital currency, the Chinese government has maintained its ban on all cryptocurrency trading and mining, dubbing it “illegal fundraising”. Despite this, China is still a global leader in terms of crypto mining, second only to the United States.

U.S. Suspicions of the Digital Yuan

United States officials have reservations about the digital yuan (e-CNY), citing concerns about its security, and setting plans in motion to ban its use from U.S. app stores due to its risk as a security threat to the nation. Other concerns include the blockchain-based BSN of China.

To conclude, over 80 countries in the world are working to develop their own digital currency, and China leads by example. While the U.S.’ own digital currency is still in the research stage, the economic powerhouse has certainly adopted cryptocurrency more positively than China, and is making significant strides to balance the market with new legislation that would keep the emerging sector regulated, while not hindering innovation.