The southern city of Shenzhen started distributing 30 million yuan (approximately £3.7m) worth of free digital cash on Monday to revive consumption and aid businesses. The move comes days after Xiong'an New Area, in northern Hebei province, launched a similar campaign to hand out 50 million yuan (approximately £6m) worth of e-CNY 'red packets' as gifts.
China is actively developing a central-bank digital currency. Issuing these e-CNY subsidies has the dual purpose of encouraging consumption and further promoting use of the electronic yuan.
Transactions using e-CNY totalled 87.6 billion yuan (approximately £10bn) at the end of 2021, with 261 million individual e-wallets opened, according to the central bank.
"Previously, when the government issued subsidies, there could be certain obstacles before the money reaches the recipients," said G Bin Zhao, senior economist at PwC China. "With e-CNY, the cash directly lands into your hands."...