South China City’s Digital Currency Test Aims to Keep Migrants From Heading Home for the Holidays
What’s new: A district in China’s southern megacity of Shenzhen will hand out 20 million yuan ($3.1 million) worth of digital currency to migrant workers who stay in the city over the coming Chinese Lunar New Year holiday, as part of an ongoing series of pilot programs to test the virtual yuan developed by the country’s central bank.
The local government of Shenzhen’s Longhua district said (link in Chinese) Wednesday that it will issue 100,000 digital “red envelopes” worth 200 yuan each to 100,000 people working at the district via a lottery. The recipients will be able to spend the virtual money from Feb. 1 to Feb. 9, ahead of the Lunar New Year holiday, to buy products in about 3,500 shops in the district that are capable of accepting digital yuan payments, including supermarkets.
The background: The move comes as the Chinese government encourages migrant workers to stay in the cities where they work during the upcoming weeklong holiday, traditionally the busiest time of the year for travel in the country, as part of ongoing efforts to contain a resurgence of Covid-19 cases.
It will be the third time that Shenzhen has tested the virtual yuan by issuing virtual red packets. China’s central bank is one of the world’s first major central banks to test out a digital currency.
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