The digital yuan also received the smart contract function, enabling users to win prizes, amongst other uses.
China has made some earnest attempts to increase the adoption of the digital yuan, or eCNY, which has been facing low usage metrics. The CBDC, which has captured only 0.13% of the 10.47 trillion yuan currently in circulation, was upgraded with several use cases and with the smart contract functionality.
The smart contract function was initially launched in the retail and food delivery app Meituan. When users of the app pay for their orders using their eCNY wallet, a smart contract comes into force and searches their orders for words and items matching the keywords of the day. In case of a match, the user becomes eligible to go into a draw to win prizes. The prize would be a part of the traditional hongbao or ‘red envelopes’, which are used to send money during the Chinese new year. In this case, the hongbao would contain 8888 yuan.
Among the other use cases for the eCNY, investors were enabled to buy securities using the CBDC, and digital yuan wallets were updated for users to make contactless payments even without internet connections on their devices. Authorities in China would hope for better adoption of the CBDC after the current developments.