China Will Release 10 Million Digital Yuan in Its First Public Test

The Chinese central bank is issuing digital coins worth 10 million yuan ($ 1.5 million) to 500 users, who will be chosen at random, in a move that some see as the country’s first public test of the yuan’s digital payment system.

The People’s Bank of China (central bank) campaign comes at a time when central banks around the world are racing to issue their digital currencies to modernize payment systems as well as ward off potential competition from private cryptocurrencies.

Starting Friday, anyone in Shenzhen, southern China, can apply to join the program through the country’s four largest banks. However, only some will win 200 yuan through a lottery, according to the local government and banks.

Winners can use the digital currency at 3,389 retail outlets, including Sinopec gas stations, Walmart stores, CR Vanguard malls and Shangri-La hotels.

On Thursday, Kenji Okamura, the top Japanese diplomat involved in financial affairs, said China was seeking to gain the lead in its efforts to develop a digital currency.

Today, a group of seven major central banks, including the US Federal Reserve, set out to define what digital currencies might look like, in an effort to catch up with China’s pioneering role and outpace private projects such as the stablecoin of Facebook’s Libra.