The Chinese central bank has recently claimed that its digital yuan giveaway program is significantly contributing to the adoption of Central Bank Digital Currencies (CBDCs). According to the state-run newspaper, the People’s Daily, the Digital Currency Research Institute, which is the dedicated digital yuan arm of the central People’s Bank of China (PBoC), has reported a high success rate for CBDC giveaways.
Driving Adoption through Giveaways
Banks, tech giants, and city governments in China have been offering millions of dollars worth of CBDC tokens, discount vouchers, wearable devices, and smartcard-type hard wallets to incentivize the use of digital yuan. These giveaways are aimed at encouraging widespread adoption of the CBDC within the country.
“In some places, uptake has even been as high as 99%,” the institute noted, highlighting the positive response to the giveaways.
Critics have questioned the success of these programs, arguing that CBDC transactions account for less than 2% of the Chinese payments market. However, the data provided by the Digital Currency Research Institute contradicts this belief, showing that over 90% of the coupons and coins issued in giveaway events have been redeemed.
Expanding Digital Yuan Usage
The institute also revealed that in certain pilot areas, giveaways have resulted in a remarkable increase in digital yuan usage, reaching over 15 times the previous levels. This showcases the positive impact of the CBDC giveaway program in driving adoption across different regions.
“The Chinese central bank’s approach with the digital yuan’s introductory giveaways has been highly successful in increasing its usage,” said an anonymous expert in the field.
Furthermore, the People’s Bank of China has actively sought partnerships with prominent e-commerce platforms like JD.com and Meiutan, offering e-CNY-paying customers exclusive discounts and other benefits. However, the focus has recently expanded beyond the retail sector, with an emphasis on the role of the digital yuan in cross-border trade, tourism, and domestic business.
Smart Contracts and Customized Offerings
Dong Ximiao, the Chief Researcher at China Merchants Union Finance and a senior researcher at Fudan University, highlighted the potential impact of digital yuan smart contracts on adoption. These smart contracts can cater to the specific needs of the government and facilitate the customization of fiscal subsidies. Moreover, they enable comprehensive monitoring of the entire fund issuance process.
“With smart contract technology, Chinese businesses and state-owned firms have greater impetus to adopt the digital yuan,” stated Dong Ximiao.
In recent weeks, the People’s Bank of China and its partners have also targeted overseas visitors to China by introducing English language options in the official CBDC app. This move coincided with China’s hosting of the Asian Games in Hangzhou, demonstrating the country’s commitment to promoting the digital yuan internationally.
Additionally, partner banks have been providing content that educates international students on how to utilize the digital yuan for making payments, further expanding its potential user base.
