China digital currency: Beijing, Suzhou confirm latest trials as e-yuan tests top 100 million yuan

Andrew Mullen
·2-min read

Beijing and Suzhou will issue a total of 40 million yuan (US$6.2 million) in the latest trials of the nation’s digital currency this week in a bid to boost consumption over the upcoming Lunar New Year holiday.

The China Daily reported on Monday that, according to government notice issued over the weekend, Beijing will distribute 10 million yuan in digital red packets each worth 200 yuan (US$31) via a lucky draw each on Wednesday for use both online and offline.

Users will be able to spend the money until February 17 in selected online and physical shops, covering clothing and shoes, cinemas, hotels and other areas.

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On Friday it was reported that Suzhou will distribute 30 million yuan, also from Wednesday, as part of its second trial of the so-called e-yuan.

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In Suzhou, winners of the 200 yuan red packets will be able to spend the money until February 26 in both offline and physical shops, with over 10,000 businesses expected to support payments using the digital currency during the trial, covering items including groceries, daily necessities and catering.

In December, Suzhou distributed 20 million yuan during its first trial of the digital currency.

Shenzhen has also distributed digital currency worth 50 million yuan in three batches since October 2020, meaning trials of the digital currency now total around 110 million yuan.

At the end of January, Beijing, Shanghai and Guangdong, China’s wealthiest province, all made new commitments to test the digital yuan.

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

Unlike bitcoin and other cryptocurrencies, the DCEP is issued and backed by the country’s central bank and is designed as a digital version of the yuan.

A number of other pilot projects for the digital yuan have been held in Xiongan, Chengdu and venues for the 2022 Winter Olympics in Beijing, but the central bank has said there was no official timetable for the launch of the digital yuan.

While China is making considerable progress, and hopes to use its nascent digital currency to help internationalise the yuan, several other nations are warming to the idea of relying less on hard cash.

Most Group of 20 countries are either exploring, developing or testing digital currencies, while other nations such as Sweden, Norway, Switzerland and Cambodia have also said they are considering digital currencies.

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