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China’s CBDC Adds New Features To Include Smart Contract

China’s Central Bank Digital Currency (CBDC) — the digital yuan, or eCNY — has been upgraded to include smart contract capability as well as a slew of new use cases. According to a Jan. 17 article by local crypto media site 8btc, the smart contract capability was released on the Meituan app, a Chinese app that offers retail and food delivery services.

A smart contract is triggered and searches for keywords and bought products in Meituan customers’ orders when they make an order and pay with their e-CNY wallet. If a user purchases anything from the list of keywords for the day, they are entered into a drawing to win a portion of a reward.

The award is a portion of a “red envelope,” or hongbao in Chinese, containing 8,888 yuan, or little more than $1,300. Hongbao are little packets of money that are usually given as a good luck gesture during Chinese New Year.

In December of last year, the e-CNY wallet app included a function that allowed users to send digital red envelopes in an effort to increase adoption before the Chinese New Year on January 22.

Along with the most recent development, additional applications for the e-CNY have been added in recent days. According to a January 16 story in the China Shares Journal, e-CNY was utilized for the first time to purchase securities. Investors may also utilize the CBDC to purchase stocks using the Soochow Securities mobile app.

According to a Jan. 11 Yicai Global article, the digital yuan wallet app has also been updated, with users now able to conduct contactless payments using Android phones even if their device lacks internet or electricity. The new applications for the digital yuan come as China struggles with CBDC adoption.

In December 2022, a former official from the People’s Bank of China (PBOC), the country’s central bank, made a rare public admission that the digital yuan’s “usage has been low” and “highly inactive,” adding that “the results are not ideal.”

On January 10, the PBOC included e-CNY for the first time in currency circulation reports, revealing that the CBDC represented roughly 0.13% of the 10.47 trillion yuan ($1.54 trillion) in circulation at the end of 2022.

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Jeewan Singh is CryptoShrypto’s content writer and a seasoned writer with over two years of experience in writing about Indian Securities Market. Jeewan's participation in Blockchain and Cryptocurrency started in late 2020, and he hasn't looked back since. The technical and economic outcomes of cryptocurrency are what spark his curiosity, and he keeps one eye on the market.
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