China's central bank digital currency (CBDC) has seen new use cases in recent days, including buying securities and making offline payments.
China’s Central Bank Digital Currency( CBDC) — the digital yuan, or eCNY — has taken upgrades giving it smart contract functionality alongside a series of recently unveiled use cases.
The smart contract function was launched on the Meituan app, a Chinese app for immolation retail and food delivery services, according to a Jan. 17 report by local cryptocurrency media outlet 8btc.
When Meituan users place an order and pay with their CNY wallet, a smart contract triggers and searches for keywords and bought particulars in their order. However, they go in the draw to win part of a prize, If a user buys something on the list of keywords for the day.
The prize is a share of a “ red envelope ” known locally as hongbao containing,888 yuan, worth a little over$,300.
Hongbao are small packets traditionally used for gifting money around Chinese New Year as a gesture of good luck.
In December last year, the thee-CNY wallet app introduced a point for users to shoot digital red envelopes in a bid to boost adoption before the Chinese New Year on Jan. 22.
Digital yuan sees new avenues for use
Alongside the latest development, new uses for thee-CNY have also been added over the last some days.
Jan. 16 report from the China Securities Journal said CNY was used to buy securities for the first time. Investors can also use the CBDC to buy securities with the mobile app for Soochow Securities, a local brokerage company.
The digital yuan wallet app also received an update with users now able to make contactless payments using Android phones even if their device is without internet or power according to Jan. 11 Yicai Global report.
The new uses for the digital yuan come as China has been struggling with the adoption rate of its CBDC.
Related: CBDCs not worth the costs and risks, says former BoE advisor
A former official from the People’s Bank of China( PBOC), the country’s central bank, even made a rare public admission in December 2022 saying the digital yuan’s “ operation has been low ” and “ largely inactive ” and added, “ the results aren't ideal. ”
On Jan. 10, the PBOC included CNY in currency rotation reports for the first time revealing the CBDC represented roughly 0.13 of the 10.47 trillion yuan($1.54 trillion) in rotation at the end of 2022.
(JESSE COGHLAN, Cointelegraph, 2023)