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China’s CBDC initiative gets cold reception from Hong Kong visitors

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China’s CBDC initiative gets cold reception from Hong Kong visitors

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  • Shenzhen, China’s southeastern metropolis has begun to issue digital yuan hard wallets to Hong Kong tourists, but demand has fallen short of expectations thus far.
  • The goal was to distribute 50,000 digital yuan hard wallets during 22 February- 31 March but as of 26 February, only 625 visitors had taken advantage of the offer.

The city of Shenzhen, China’s southeastern metropolis that connects the mainland to Hong Kong, has begun to issue digital yuan hard wallets to Hong Kong tourists, but demand has fallen short of expectations thus far.

Local authorities in Luohu, a Shenzhen district on the border between Hong Kong and the mainland, installed China’s first digital yuan hard wallet dispenser machines on 18 February, which are only available to Hong Kong residents, informed the local government on digital media.

On 22 February, the country’s first digital renminbi hard wallet self-service card issuing machine was officially launched.

Luohu launched the initiative in collaboration with the Bank of China and Octopus Cards, a Hong Kong-based smart card for payments. It aimed to provide visitors to Shenzhen and Hong Kong with secure, efficient, and convenient digital renminbi payment services.

The goal was to distribute 50,000 digital yuan hard wallets during 22 February- 31 March but as of 26 February, only 625 visitors had taken advantage of the offer, reported the local media.

Visitors from Hong Kong could obtain digital yuan hard wallets from the machines by entering their real names and topping them up with Octopus cards.

The wallets can then be used to shop at over 1,400 merchants in the Luohu district, where users receive a 20% government consumption subsidy.

China big on CBDC adoption

China’s central bank digital currency (CBDC), digital yuan, or e-CNY, is being tested in at least 26 provinces and cities across the country.

Shenzhen distributed 100 million yuan (US$14.5 million) in digital yuan during the Lunar New Year earlier this year, which could be used in the city’s restaurants and food businesses to aid economic recovery following the lifting of Covid-19 restrictions.

Despite China’s efforts to promote CBDC, the project faces adoption challenges, including limited use cases and competition from other established payment services such as Alipay and Wechat.

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Saman Waris works as a News Editor at AMBCrypto. She has always been fascinated by how the tides of finance and technology shape communities across demographics. Cryptocurrencies are of particular interest to Saman, with much of her writing centered around understanding how ideas like Momentum and Greater Fool theories apply to altcoins, specifically, memecoins. A graduate in history, Saman worked the sports beat before diving into crypto. Prior to joining AMBCrypto 2 years ago, Saman was a News Editor at Sportskeeda. This was preceded by her stint as Editor-in-Chief at EssentiallySports.
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