The People’s Bank of China will be using a lottery to conduct a second city-wide test of its central bank digital currency, known as Digital Currency Electronic Payment (DC/EP), in the city of Suzhou, according to The Block.
The second city-wide test of its central bank digital currency taking place in Suzhou, 65 miles west of Shanghai, will be on a much wider scale than the first one, which took place in Shenzen in October.
The city of Suzhou announced on Friday that it will give away 20 million yuan ($3m) in the form of a digital renminbi via lottery, double the amount given away in Shenzhen’s test.
The purpose is to encourage the testing of DC/EP during the upcoming ‘Double 1’ online shopping season.
China’s e-commerce giant JD.com will be allowing lottery winners to spend their DC/EP via the e-commerce giant’s mobile app on goods from its proprietary warehouses only. JD.com added its proprietary offline stores are also among a total of nearly 10,000 physical shops that will support the DC/EP payments during the test.
Shenzhen’s test in October was meant for its 50,000 residents with a total of 10 million digital yuan available, but in the end, nearly two million people signed up for the lottery, meaning the winning probability was already less than 3%.
While the population of Suzhou (10.7 million) is smaller than that in Shenzhen (13 million), the total participants of the second test are now doubled to 100,000 residents. However, it remains to be seen how many Suzhou residents will participate in the lottery, the results of which will be revealed on December 11.
During the Shenzhen rollout, residents had less than seven days to spend their free digital yuan. For Suzhou, the test period has been extended to more than two weeks from December 11 to December 27.
Suzhou’s test will involve a wider scope of technological advancement with the introduction of an offline payment feature for DC/EP in a very controlled environment.
China’s four biggest state-owned commercial banks (Industrial and Commercial Bank of China, China Construction Bank, Agricultural Bank of China and Bank of China) have participated in the development of mobile and hardware wallets for DC/EP so far, with two more (Bank of Communications and the Postal Savings Bank of China) being added for the Suzhou test.