The Chinese province of Hebei is attempting to spur digital yuan adoption by issuing residents central bank digital currency (CBDC) discount coupons.
The coupons, Hebei Daily News reported, will see citizens in Baoding’s Xiong’an New District enjoy subsidized discounts of up to $73.
They can use these to get money off on purchases made at participating home appliances and furniture vendors.
Several restaurants and supermarkets are also participating.
The event will run until June 4.
And customers will need to pay in digital yuan in order to access the discounts.
The coupons will also have fixed-time expiry dates.
The province said that 99 merchants in the district were participating in the drive.
The coupons will be distributed in daily draws.
The event is being organized by a number of Xiong’an local government organs, as well as the local branch of the central People’s Bank of China.
A state-owned commercial bank, the Bank of Communications, will also be taking part in the project.
How Is Digital Yuan Rollout Going?
In a column for the Economic Daily, the op-ed writer Zi Fang Xiansheng remarked:
“To put it bluntly, digital China incentives are almost meaningless without a digital yuan.”
The writer pointed to the government-authored Digital China Development Report of 2022, which noted that the size of China’s digital economy was projected to reach the $7.3 billion mark last year.
Zi Fang Xiansheng called the token an “important engine of transformation,” and said:
“It can be said that the [launch] of the digital yuan is a necessary step that will help the development of the Chinese digital economy.”
Chinese CBDC Adoption Facing Snags?
A number of critics have expressed doubts about the digital yuan.
Some have claimed that adoption efforts have focused too much on token giveaways.
And this, they claim, has created artificial spikes in wallet openings.
They state that transactions unrelated to giveaways have been relatively sluggish.
A popular Chinese finance blogger named Not Obsessed with Finance claimed that “not many people” currently use the central bank digital currency.
He claimed that concerns about privacy were holding the token back.
He also stated that the digital yuan lacks fund management functionality and that “usage scenarios” were still lacking.
The blogger backed up his claims with statistics, claiming:
“The cumulative volume of digital yuan transactions in the cities ofHainan, Changsha, Xi’an, and Chongqing is less than $2.8 billion. This shows that the adoption rate for the digital yuan is relatively low.”
The blogger added:
“Even if many people have opened a personal digital yuan wallet, they do not really use the digital yuan for [daily spending] at all.”
Last month, the city of Changshu announced that it would become the first in the nation to pay its public sector workers 100% of their salaries in the digital yuan.
In March, the city of Huizhou launched a CBDC tax payment platform.
Other cities in the pilot zone have said they are also exploring similar solutions.