• China has upgraded its central bank digital currency (CBDC), the digital yuan, to include smart contract functionality.
• This function was launched on the Meituan app, which is a Chinese app offering retail and food delivery services.
• When Meituan users place an order and pay with their e-CNY wallet, a smart contract triggers and searches for keywords and purchased items in their order. If a user buys something on the list of keywords for the day, they go in the draw to win part of a prize.
In recent days, China has seen the addition of new use cases for its central bank digital currency (CBDC) – the digital yuan, or eCNY. The most recent upgrade provides the currency with smart contract functionality. This was launched on the Meituan app, a Chinese app offering retail and food delivery services.
Whenever a user places an order and pays with their e-CNY wallet, a smart contract triggers and searches for keywords and purchased items in their order. If the user buys something from the list of keywords for the day, then they are entered into a draw to win part of a prize. This prize is known locally as a “red envelope”, or hongbao, containing 8,888 yuan, which is equivalent to a little over $1,300.
This prize is traditionally gifted around Chinese New Year for good luck. The addition of this function to the digital yuan gives users a chance to win money as part of their everyday shopping experience. It also helps to promote the currency and increase its use among the Chinese public.
Alongside this new use case, the digital yuan has also seen new use cases in recent days such as buying securities and making offline payments. The Chinese central bank is also reportedly working on a digital yuan wallet and a payment system that can be used in other countries, as part of its efforts to promote the currency internationally.
These new features and use cases are all part of China’s wider plan to create a digital currency that can be used by its citizens both domestically and abroad. The digital yuan has already achieved widespread adoption in China and is seen as a viable alternative to traditional forms of payment. With these new features and use cases, the digital yuan is set to become an even more attractive option for Chinese consumers.