A recent China Daily report reports that the Chinese city of Hangzhou gave each resident an e-CNY voucher worth 80 yuan (USD 12) on January 16, amounting to a total expenditure of about 4 million yuan (USD 590,000). The Global Times reports that city residents used the government-gifted e-CNY for New Year celebrations in just nine seconds, according to data from e-commerce platform Meituan.
The government has been trying to promote the use of the central bank’s digital currency (CBDC) in China in recent months, and senior ruling party officials in Suzhou city set a tentative target by the end of 2023 to have 2 trillion yuan (USD 300 billion) in e-CNY transactions in the city. Cumulative e-CNY transactions only exceeded 100 billion yuan (USD 14 billion) in October 2022, two years after the launch of CBDC.
To attract new users, the e-wallet app introduced the ability to send “red packets” in December last year, which are used to give money as gifts during the holidays. In addition, the app received an update in early January that allows users to make contactless payments with Android phones even if the device runs out of Internet or power.
In December, a former Chinese central banker called e-CNY’s test results “not ideal” and admitted that “its usage has been low and very inactive.”