The multiple Chinese city government has carried out an extraordinary policy: to distribute and give away millions worth of Digital Yuan to increase the amount of use during the holiday season. And this is evidenced by its increased use in the Lunar Year.

According to data released on February 6 by the Global Times, around 200 activities for the Chinese Digital Yuan were launched across the country during the holiday period. This activity is considered a way to promote consumption for the first time since Covid 19.

Multiple cities reportedly gave away over 180 million yuan worth of CBDC in programs such as subsidies and consumption coupons. Meanwhile, the Shenzhen local government has issued 100 million yuan worth of e CNY to subsidize the city's catering industry.

Some of these initiatives proved to be very popular among residents. Citing the data, this e-CNY given away can help the government enact other targets and features to boost the usage of the CBDC. The target is quite ambitious, considering the cumulative e-CNY.

What is Digital Yuan, and Why China Distributes Million of Them?

There are still many questions about what Digital Yuan or e-Yuan is. This is a solution and an alternative to China which banned trading like Bitcoin and Stablecoins in their country, so the national digital currency was released.

Digital Yuan is a digital currency regulated by the Central Bank of China, whose primary goal is to replace other existing currencies in China. This digital payment is also a way for China to reduce the use of cash in the future and focus on the digital payments arena.

Digital Yuan and other cryptocurrencies are not the same. One of the most remarkable aspects is the digital Yuan's legal status since its position presents it as a legal tender. 

On the other hand, other cryptos, such as Bitcoin and Ethereum, do not have this kind of centralized structure. So that no government network or bank can control the usage of this digital currency.

The digital Yuan is also a state-formed centralized structure and regulates all the activities. The feature between Yuan Digital and crypto is also related to anonymity to varying degrees.

The People's Bank of China also introduced easy access to all with low transaction costs. In addition, digital Yuan provides controlled anonymity to reinforce competition among payment service providers, and this can also track illegal activities.

This strategy follows China's success in increasing the use of the digital Yuan during the Lunar New Year

The digital Yuan is fully backed and regulated by the People's Bank of China, and this is centralized as money in circulation. There are digital wallets whose job is to include certain liabilities so that consumer use of digital Yuan will be beneficial.

People can now clearly tell that China's digital Yuan makes access to transactions easier. This is also proven by China's success in increasing the amount of e Yuan usage. The latest data released is during the Lunar New Year which e Yuan is very popular.

Chinese consumers have shown rising enthusiasm for digital currency too. China-based e-commerce platforms, which usually provide life services, also offer access to payments using digital Yuan. So this allows Digital Yuan to grow more.

Commercial institutes also participated in consumption promotions with digital Yuan. This can be done with more diversified activities, starting from mobile, supermarkets, tourism, and other sectors. Can you start using digital Yuan for daily use and others?

China has reported that the Digital Yuan is increasingly ready to enter market access. The Chinese Yuan experienced a massive increase in usage during the last Lunar New Year. This is also related to China's strategy to increase the Digital Yuan and distribute millions of e Yuan.