E-CNY gathers momentum on 618

Tech giants, commercial banks and local-level governments in China further promoted the use of digital yuan in the run-up to and during the June 18 or "618" shopping carnival and carried out trials in more fields like lending and tax refunds.

For instance, on May 30 and June 9, to boost consumption in the wake of a COVID-19 outbreak, the Shenzhen Municipal Government distributed red packets worth 30 million yuan ($4.48 million) denominated in the digital currency via Meituan, a leading Chinese tech and online retail company.

The local government offered consumers in Shenzhen, Guangdong province, digital red packets through a lottery to spend the embedded money at more than 15,000 offline merchants as well as online consumption scenarios provided by Meituan. These included food delivery, ride-hailing and hotel-booking options.

From May 30 to Sunday, red packet lottery participants used the digital yuan, also known as the e-CNY, at over 52,000 merchants in Shenzhen listed on Meituan's platform. Their total number of orders increased by 58.9 percent year-on-year and the total order value rose by 64.6 percent year-on-year.

Similarly, the Chengdu Municipal Government in Sichuan province distributed digital yuan consumption vouchers via the platform this month. Driven by a plethora of digital yuan red packets and consumption vouchers, Meituan users showed an enthusiasm for consumption using the e-CNY. From May 30 to Sunday, the average daily number of orders on Meituan paid in the e-CNY rose about 115 percent, compared with the number from May 9 to May 29.

JD Technology, a subsidiary of e-commerce giant JD, joined hands with Bank of Communications, Postal Savings Bank of China and Ping An Bank to distribute red packets worth more than 10 million yuan in digital yuan from May 31 to Saturday in 23 areas participating in China's e-CNY pilot.

During this period, the value of consumption on JD paid in e-CNY reached 400 million yuan, exceeding the total value between December 2020, when JD started participating in the pilot, and May this year.

Earlier this month, Agricultural Bank of China's branch in Taicang, Jiangsu province, issued a loan of 1.5 million yuan in the e-CNY to a new material technology company, which had already opened a digital yuan wallet. The company received the loan instantly and used the money to pay its supplier. The bank charged no transaction fees during the whole process.

By granting a digital yuan-denominated loan to a small business, the bank not only provided a new channel of lending that is highly efficient but also ensured the purpose for the loan is genuine and reliable, said Huang Xiaodong, deputy general manager of the digital yuan innovation lab at Agricultural Bank of China's Suzhou branch in Jiangsu province.