After years of the devastating Covid-19 lockdowns and the recent recurrences of the pandemic in parts of China, the city of Shenzhen is looking to revitalize its battered economy. To achieve this, officials are looking to spur consumption through a Crypto airdrop.
According to the Shanghai security news, there is a plan to airdrop 30 million digital Chinese yuan (e-CNY) in Shenzhen. The joint program is being undertaken by the city of Shenzhen and Meituan Dianping, China’s leading food delivery app.
To benefit from the airdrop, residents of the global tech hub city have to download the Meituan App, sign up for an account and log in, subscribe to the incentive program, and receive the CBDC tokens.
The e-CNY can be redeemed from over 15,000 in-app merchants on the app, a strategy likely to be a windfall for the cash-strapped e-commerce platforms in the food supply chain.
The Chinese CBDC is A Now Reality
In early May 2022, the Zhejiang news reported the rollout of tax and stamp duty payments trials using the e-CNY. The project pilot is ongoing in the cities of Shaoxing, Hangzhou, and Jinhua in Zhejiang province, and the project is being facilitated by the People’s Bank of China (PBoC). There is a similar program in Shenzhen in the province of Guangdong, where city citizens can pay their taxes in e-CNY, which has been touted as a game-changer regarding convenience.
The Zhejiang trials aim to test the effectiveness of the digital Renminbi in readiness for application in Asian games that are set to take place between the 10th and 25th of September in Hangzhou.
Most Chines Provinces Are Incentivizing Household’s Expenditure
Chinese Premier Li Keqiang recently expressed concerns that the stringent covid 19 protocols have slammed the brakes on China’s economic miracle. For this reason that 20 out of 31 provinces are incentivizing spending to revitalize economic activity.
Although a similar program in the US, where trillions of fiat dollars were sent to households to cushion them against depressed incomes, has been linked to the galloping US inflation rate. Chinese authorities do not consider inflation a potential risk in their e-CNY airdrop.
CBDCs are Disrupting the Crypto Market
CBDCs are a new addition to the growing digital asset options. Although critics believe that these tokens contravene the Blockchain principle of offering complete financial autonomy, there are stable since central banks back them.
Bahamas is one of the other countries with CBD. Bahamas Prime Minister Phillip Davis introduced a whitepaper in parliament outlining the benefits and roles of the Sand Dollar-the local CBDC.
The Banco Central de Chile (BCC) is also developing a Chilean CBDC, and it extended a lapsed timeline as it seeks to establish a national Crypto.