Meituan, one of China's most renowned homegrown e-commerce applications, was recently used in the country's debut (1) smart contract capabilities for its digital yuan. Users who use the digital yuan are now eligible to win a portion of a daily monetary prize totaling $1,312 thanks to a newly activated smart contract.
The feature of smart contracts was added to China's central bank digital currency (CBDC) while newly disclosed use cases were made public. Purchasing securities and making payments offline are examples of how the digital yuan, also known as eCNY, might be used.
Details of the Smart Contract Functionality
This transaction will activate the smart contract whenever a user puts an order using the Meituan app and then pays for it through their eCNY wallet. The independent payment protocol then searches for particular keywords in the list of merchandise and looks for the name of the specified retailer.
When a buying user acquires products that fall inside the list of keywords for a given day, they are eligible to win a reward associated with that day. Users who meet the requirements may enter a daily drawing to win 8,888 yuan, equivalent to $1,312. If they were successful, they would get this amount in cash.
This award consists of a portion of a "red envelope," also known as "hongbao" in the local dialect. Some people will be randomly selected to receive the hongbao, which will then be distributed among them.
The name "hongbao" originates from the custom of giving money in the form of little packets known as "hongbao" during the Chinese New Year holiday. It is often believed that making this gesture will bring one success.
More Avenues to Use the CBDC
Several additional use cases have been included over the past several days as part of the development of the digital yuan smart contract capability.
For example, recent reports suggested that investors might use the CBDC to purchase equities for the first time. In addition, investors could make share purchases using the mobile app of local brokerage business Soochow Securities by using eCNY.
Users can now make contactless payments with the digital yuan using mobile devices that run Android. Even with no internet connection, making these types of payments is still possible.
The new and noteworthy applications for the digital yuan should be seen as progress that the Chinese government should be pleased to see.
Since the release of the CBDC the previous year, the East Asian nation has suffered from a low acceptance rate for crypto currency. It was reported that the digital yuan only made up 0.13 percent of the overall circulation of the Chinese renminbi yuan by the end of the year 2022.
Around the same time, a former official with the People's Bank of China (PBoC) revealed that few people were using the digital version of the yuan. The former official also stated that the CBDC's adoption was extremely inactive and that the outcomes did not meet their expectations.