China’s central bank’s digital currency (CBDC) — the digital yuan, or eCNY — has received improvements that give it smart contract functionality, along with a number of newly revealed use cases.
When Meituan users place an order and pay with their e-CNY wallet, a smart contract will run and search for keywords and purchased items in their order. If a user purchases something from the keyword list for that day, they will be entered into a drawing to win a portion of the prize.
The prize is a share of the ‘red envelope’, known locally as Hongbao containing 8,888 yuan worth just over $1,300.
Hongbao are small packages traditionally used to give money around Chinese New Year as a gesture of good luck.
In December last year, the e-CNY wallet app introduced a feature for users send digital red envelopes in an effort to encourage adoption ahead of Chinese New Year on January 22.
The digital yuan sees new uses
In addition to the latest developments, new uses for e-CNY have also been added in recent days.
January 16 message of China Securities Journal reported that e-CNY was used for the first time to buy securities. Investors can also use CBDC to purchase securities using the mobile app for Soochow Securities, a local brokerage firm.
The digital yuan wallet app has also received an update that allows users to now make contactless payments with their Android phones even if their device is without internet or power, according to Yicai Global on the 11th. message.
The new use of the digital yuan comes as China struggles with the adoption rate of its CBDC.
A former official from the People’s Bank of China (PBOC), the country’s central bank, even made a rare admission to the public in December 2022, he said that “the use of the digital yuan was low” and “highly inactive”, adding: “the results are not ideal”.
On January 10, the PBOC included e-CNY in currency circulation reports, revealing for the first time that CBDC accounted for roughly 0.13% of the 10.47 trillion yuan ($1.54 trillion) in circulation at the end of 2022.