China Handing Out Free Money To Citizens To Test Experimental Currency

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Residents of Beijing, China, can participate in a June lottery by China’s central bank that will handout an equivalent of $6.2 million in its soon-to-be-launched digital currency.

A total of 200,000 lottery winners will receive “red envelopes” containing 200 digital yuan ($31.34), which they can use until June 20. The prize money can be spent at a select group of local merchants around the capital, according to Reuters.

A number of other Chinese cities, including Shenzhen and Chengdu, have launched similar trials testing the central bank digital currency (CBDC) before a nation-wide rollout, CNBC reported.

The People’s Bank of China (PBOC) has reportedly been developing its CBDC since 2014 and is set to become the first major central bank to issue a digital currency.

The PBOC is eyeing nationalization of the services currently provided by private companies, such as Ant Group and Tencent, which has online payment platforms that have largely replaced physical banknotes and coins in recent years, according to Reuters. (RELATED: China’s Central Bank Reportedly Will Be Ready To Release Its Own Digital Currency Soon)

PBOC Deputy Governor Li Bo has previously dismissed claims alleging that Chinese CBDC has an objective of subverting the dominance of the U.S. dollar as an international currency.

“For the internationalization of renminbi, we have said many times that it’s a natural process and our goal is not to replace (the) U.S. dollar or any other international currency,” Li said in April, according to CNBC. “I think our goal is to allow the market to choose and to facilitate international trade and investment.”