China Hands Out $6.2M for Digital Yuan Tests as Russia Says CBDC are the Future

Residents of the Chinese capital will receive 40 million renminbi ($6.2 million) of the digital currency. They can use two banking apps to apply to win one of the 200,000 so-called ”red packets”, each containing 200 yuan, as part of a lottery.

Simultaneously, the governor of Russia’s central bank called digital currencies the future of money.

Another CBDC Trial in China

In yet another attempt to test its CBDC, the Chinese officials decided to distribute 40 million renminbi ($6.2 million) to Beijing residents. The handout will be on a lottery principle. Those who wish to apply for the funds can do that until June 7th.

According to the Beijing Local Financial Supervision and Administration Bureau, the citizens of the Chinese capital can apply for the handout by using two banking applications. The so-called ”red packets”, which they can win, will be 200,000 as each one is valued at 200 yuan (about $31).

The second-largest economy has been developing its CBDC since 2014. Previously, other Chinese megapolises also tried the lottery move. For example, the southwestern city of Chengdu handed out 40.2 million yuan of digital currency in February. Back in 2020, the technology hub of Shenzhen also completed the maneuver but handed out a smaller amount – 10 million yuan (about $1.5 million).

The Chinese authorities proved their ambition to expand the scope of its pilot CBDC projects in April when they announced that athletes and foreign visitors at the 2022 Beijing Winter Olympics could possibly use the digital currency:

”For the upcoming Beijing Winter Olympics, we were trying to make e-CNY available not only to domestic users but also to international athletes and like visitors.”

Digital Currencies Are The Future in Russia

The world’s largest country by landmass, Russia, is also looking into launching a CBDC. The central bank governor – Elvira Nabiullina – opined that central bank digital currencies are the future of the nation’s financial system.

In addition, she pointed out that society needs fast and cheap payment systems referring to digital currencies as the solution. However, she asserted that a project of this type is not easy:

”I think it’s the future for our financial system because it correlates with this development of the digital economy. We will go step by step because it’s a very difficult, technological, legal… project.”

Nabiullina mentioned the ”de-dollarization” politics, which Russia leads, and how the e-ruble can help with. She opined that many countries swap to more diversified international reserves, but the trend would shift slowly:

”It will happen, but not very fast.”

Apart from its CBDC endeavors, Russia has also made several moves to regulate the cryptocurrency space. Residents who exceed digital assets transactions of 600,000 rubles ($8,184) are required to declare those deals. The regulators warned that those who fail to disclose information about their crypto investments would be slammed with a 10% fine of the undeclared amount.