To celebrate the start of spring, several cities in China gave away the national central bank digital currency (CBDC) e-yuan. In total, the municipalities distributed over 180 million of the digital e-yuan (about 26.52 million US dollars) to the population. That comes from one report of the Chinese daily newspaper Global Times. Regional governments launched 200 different activities in the form of subsidies and consumption vouchers to encourage adoption among citizens.
The metropolis of Shenzhen alone is said to have distributed over 100 million e-yuan to the city dwellers. It is the first time that China has distributed its own CBDC since the corona easing. Most recently, Shenzhen E-Yuan gave away at the end of May last year.
E-Yuan, a flop in China?
Although the organizers rate the advertising campaigns as a “success”, observers rate the adoption in the population as rather low. For example, a former employee of the People’s Bank of China (PBOC) revealed to the news portal Caixin “disappointed” with previous use.
dr Jonas Gross sees the problems in the lack of advantages that the e-yuan offers over third-party digital payment options. “Why should a CBDC be used as a means of payment when there are already more efficient, cheaper and more convenient providers such as WeChat Pay or Alipay in China,” said the chairman of the Digital Euro Association. The European Central Bank (ECB), which is also working on a digital alternative to the euro, could learn important lessons for its own project, Gross continued.
However, China is not alone in the low adoption rate. In Nigeria, too, acceptance of the e-Naira among the population has so far been limited. As a result, the central bank restricted the use of cash. As a result, the population increasingly switched to Bitcoin, which led to BTC prices of 60,000 US dollars on individual P2P exchanges. And in China too, crypto activities remain high despite the ban.