China Pushes CBDC as ‘Good Luck’ Gifts Ahead of New Year Celebrations

Considered as a symbol of ‘good luck’, the ‘red packets’ — also called the ‘Hongbao’ — are used for presenting people with money as a gesture of luck.

Written by Radhika Parashar, Edited by Siddharth Suvarna | Updated: 28 December 2022 15:33 IST

China Pushes CBDC as ‘Good Luck’ Gifts Ahead of New Year Celebrations

Photo Credit: Unsplash/ Ezreal Zhang

The launch of China’s CBDC began and went into trials between 2020 and 2022

Highlights

China is among first nations to roll out CBDC widely
e-CNY is already in use for day-to-day payments
WeChat, Alipay also offering similar red packet gifting feature

China, which has been accelerating its efforts to drive the adoption of its CBDC, has undertaken a new experiment, coloured in traditions, to get more people to use the e-CNY. The Chinese authorities have introduced a feature for existing CBDC users that would enable them to send money to their friends and family as ‘red packets'. Considered as a symbol of ‘good luck', the ‘red packets' — also called the ‘Hongbao' — are used for presenting people with money as a gesture of luck.

Unlike most parts of the world, China celebrates its New Year on January 22. The country, hence, has released this CBDC promotional strategy keeping the margin of a month in advance.

China's dedicated app for the e-CNY CBDC, will let users send red packet to one person at a time. Users also have an option to establish a ‘lucky draw' that could earn the nominees a random amount from a pool of funds.

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WeChat Pay and Alipay — other online payment service providers in China — are also offering digital red envelopes to get more people to gift money virtually during this holiday season, CoinTelegraph said in a report.

The growing popularity of this gifting trend evidently shows the rising interest that people in China have begun to show interest towards.

China launched its e-CNY app to facilitate payments through the CBDC between 2020 and 2022.

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In September last year, China imposed a blanket ban on all crypto-related activities. Along with the volatility of the crypto sector, the electricity required to keep the operations up and running had become a matter of concern for the Chinese authorities.

Despite restricting crypto activities, China did not turn its back on the blockchain technology.

It began work on its CBDC. A blockchain-representation of the national fiat currency, a Central Bank Digital Currency (CBDC), is issued and monitored by central banks.

Financial transactions done via CBDC ensure that all the records are transparent and unchangeable.

Around April 2022, China made its CBDC trials available in 23 cities including Shanghai, Beijing, and Shenzhen. Residents of this city can pay for goods and services with the e-CNY, China-Briefing had said at the time.

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Further reading: Cryptocurrency, CBDC, China, e CNY

Radhika Parashar

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Radhika Parashar is a senior correspondent for Gadgets 360. She has been reporting on tech and telecom for the last three years now and will be focussing on writing about all things crypto. Besides this, she is a major sitcom nerd and often replies in Chandler Bing and Michael Scott references. For tips or queries you could reach out to her at RadhikaP@ndtv.com. More