Did you hear about the lottery run by China to giveaway digital yuan?
Yup, the government in Shenzhen doled out $1.5 million of digital yuan in $30 chunks in a “red envelope” giveaway. The experimental giveaway ended this past Sunday which was the deadline for the winners to use the digital currency at 3,000 stores in Shenzhen.
And the results are in…
According to Reuters, currency analysts unsurprising swooned about how great the digital yuan is, but the actual users who won the lottery weren’t overly impressed.
The 50,000 shoppers who each won $30 to use in a digital wallet didn’t think it was much different from mobile-phone based payment platforms already out there like WeChat and Alipay.
But the experiment does give us some takeaways.
- The digital yuan is not cryptocurrency because it’s backed by the Central Bank.
- China doesn’t like the global financial system being dominated by the U.S. dollar, and they definitely don’t like a system dominated by something like Libra, according to Linghao Bao, an analyst from Beijing-based Trivium.
- China has ambitions that everyone will one day be using digital yuan as the standard form of payment.
Btw, the “red envelopes” are the traditional way that Chinese gift money during the holidays.