The Chinese government banned all types of cryptocurrency-related activities from the region last year in September. On the other hand, the state weighed in favour of the CBDC or digital Yuan project. The Central Banks and financial regulatory authorities have already formally introduced CBDCs in the region during the last Olympics event.

On the other hand, the authorities have also run test runs for the CBDC in different regions of China. Now the administration of Shenzhen City is set to distribute 20 million digital Yuan in an upcoming airdrop event. Keeping the tradition of giving money on Chinese New Year, the government is also planning to distribute these digital national currencies wrapped in a red envelope.

Digital Yuan Red Letter Event

Much like Federal Reserve policies to print more money and distribute it among the masses, the government of China is also taking similar actions. However, rather than printing more paper money and increasing its national expenditures exponentially, the government of China is opting to send out a considerable amount of nationalized digital currencies.

According to the officials, the digital Yuan will encourage people to make more purchases and could help jump-start the stagnant economy on account of the COVID pandemic. At present, the Chinese authorities have extended the pressure on social restrictions owing to the increasing possibility of a COVID pandemic by the day. To make the distribution possible, local banks like Shenzhen Municipal Bureau of Commerce are partnering to arrange the airdrop event.

The focus of the Chinese government was to ensure that the consumers around the country were able to use the digital Yuan both offline and online. The users who are eligible to receive digital Yuan during the airdrop event will need to register or log into the Meituan application. The total amount of digital Yuan designated to be distributed among the people is valued at $4.5 million.

The people who want to take advantage of the program would need to apply for the incentive option on their Meituan accounts. The e-CNY receivers are going to be decided by a digitally organized lottery system after the draw.

People can make use of their e-CNY currency in more than 15 thousand merchant applications. On the other hand, the US government is planning to ban the users from making payments in the form of e-CNY on applications and stop the currency from becoming a global medium of value exchange like USD.