China To Introduce Digital Yuan In Suzhou City

Suzhou City is set to become the next city to sample China’s digital yuan with the city administrators preparing to roll out central bank digital currency (CBDC) infrastructure in the coming weeks.

Starting December, residents across the entire city will get the CBDC in so-called ‘red packets.’ Notably, 50,000 packets of the digital currency will be given away through a local lottery.

The trial will happen on December 12, which is China’s ‘Double 12’ shopping holiday. This holiday represents one of the busiest retail days of the year in the country, according to local media analyses. That test will build on previous trials in the city that saw state employees pay travel expenses in digital yuan.

This trial will follow a similar model to the one that was deployed in Shenzhen in October, which saw up to $1.5 million in digital currency enter circulation. All the residents that won digital currency in the lottery were allowed to spend it across 3,000 stores within the city which had signed up to participate in the trial.

Suzhou CBDC Trials

Reports state that Suzhou trials will experiment with offline payments for the digital yuan, exploring a mechanism that enables transactions to get completed by touching two devices, through near field communication (NFC). That would not need an online connection and may present additional opportunities for payments in digital yuan when the currency gets launched more widely across China.

The trial in Suzhou comes at the same time with similar measures in progress across Chengdu that is currently engaged in testing digital currency wallets. Official reports stated that the Industrial and Commercial Bank of China has already started advertising wallet features for the users operating from Chengdu. That is believed to be a part of yet another localized pilot scheme.

These trials are the latest in China’s march towards a countrywide launch. The Asian country is thought to be the most advanced of all the major global economies towards rolling out a virtual currency.