Several regions in China are distributing free digital yuan to accelerate the economy

As per recent reports, Shenzhen, Guangzhou, and Xiong’an New Area made official announcements that they are issuing free digital yuan “red pockets.” The primary reason behind the free giveaway is to boost local consumption amid the slow growth of China’s economy fueled by mass COVID lockdowns.

Free distribution of digital yuan

According to the announcement, Shenzhen will give 30 million digital yuan, worth around $4.5 million, starting May 31. It would conduct a lottery system offering residents chances to win 88, 100, and 128 red pockets.

In several countries in Asia, including China, red packets are gifts in red envelopes containing money given during special occasions. However, for China’s CBDC, the government is distributing it in the form of digital coupons.

On the other hand, Guangzhou’s district Nansha recently said that it would give out 10 million digital yuan. They are aiming to boost the catering and retail industries. However, they have not announced any date of the issue yet.

Notably, in January, the People’s Bank of China (PBoC) launched a pilot test wallet for its CBDC called the e-CNY in its effort to accelerate the development and distribution process. However, China has not been a favorite for many countries when it comes to trust and security. Recently, as TheCoinRise reported, nine Republican senators supported the bill to put sanctions on China’s digital yuan.

According to local media, Xiong’an New Area, a special economic zone southwest of Beijing, began distributing red packets on Monday as part of a 50 million yuan strategy to increase consumption.

The Caixin Purchasing Managers’ Index (Caixin PMI) fell to 36.2 in April as a result of mass lockdowns in reaction to the COVID outbreak, the lowest reading in over two years for China’s service sector.

In a countrywide video conference last Thursday, Chinese Premier Li Keqiang urged provincial, municipal, and rural authorities to speed up infrastructure projects, boost jobs, and revive development.