Shanghai Tests Digital Yuan via $3m State Lottery

Last updated on April 11th, 2023

With the ongoing worldwide crypto fever, we constantly hear news regarding digital coins. So naturally, considering how easy it is for people to make money from crypto, it won’t be long before governments worldwide impose certain universal regulations concerning crypto. Especially since blockchain technology is practically untraceable. Such is the case with China. Specifically, state officials from Shanghai will test the country’s crypto-coin, the Digital Yuan, via the $3m state lottery.

And what is even more interesting is that this is not the first such experiment conducted by China. As a matter of fact, there are currently several major Chinese cities that test the digital coin, in a similar manner. Cities such as Beijing, Chengdu, Suzhou and Shenzhen are all part of the experiment. Consequently, Beijing one of the most advanced cities in China is a perfect place to roll out such a campaign.

The total amount from the lottery winnings is $3m, or 19.25m digital yuan. Moreover, the winnings will be awarded via 350.000 digital red envelopes. Consequently, there will be 55 digital yuan per envelope. Furthermore, each citizen can apply for participation in the lottery via online registration. Consequently, the winners that will receive the red envelope can spend the digital money in specially designated stores. These stores are approved by the People’s Bank of China and already operate with the digital yuan.

However, certain experts and politicians are concerned with flooding the stock with the Chinese digital yuan. Especially if you consider the size of the population in China. Meaning that China already is pouring out millions in digital yuan. And that is why experts worldwide are showing signs of concern. One of the more vocal experts against the wide use of the digital yuan is historian Neil Ferguson. He shares the view that the digital yuan can be a ‘potentially fatal challenge to the US dollar”.

Furthermore, Michael Hasenstab from Franklin Templeton Investments is on the same page. He believes that the digital yuan can definitely compromise the dollar’s position as a reserve world currency. This comes after last week’s reports that starting the 24th of May, the digital yuan is reporting strong numbers and going. Consequently, strengthened its position against the US dollar. The main reason why many consider Shanghai testing the digital yuan via the $3m state lottery to be more than just regular news.

Regardless of the strong numbers, CNBC claims otherwise. In recent reports, the news outlet claims that China’s central bank is setting the yuan’s midpoint fix to be weaker against the USD. They say that this is in order to help overseas buyers, as well as assist with export deals. So it looks like for now the USD is safe. But, with the trend of the rise of crypto, governments worldwide must keep a close eye on the situation.

Especially since the financial potency of China is one of the perfect environments to roll out and test the first official state crypto-coin. And that can cause a domino effect on the entire market. Or, perhaps we will see the start of something completely new, and maybe even adopt it in the future. Only time will tell.