Shenzhen government distributes 3 million USD in Digital Yuan for CBDC trial
China is moving closer to rolling out its central bank digital currency (CBDC) after the Shenzhen municipal government announced a third pilot of the digital yuan on New Year’s Eve. The trial will take place in the southeastern city of Shenzhen and will distribute a total of 20 million digital yuan (roughly 3 million US dollars).
The funds will be given to residents via a lottery in 100,000 red packets, each worth 200 digital yuan. Lottery winners will be able to spend the digital currency at more than 10,000 retail centers and restaurants across the city. The pilot is scheduled to run from January 7 to January 17. Previous trials were completed in October and December of last year.
The first pilot issued 10 million digital yuan, involving 50,000 residents who spent the funds at nearly 3,000 local stores. The second pilot, held in the industrial hub of Suzhou, doubled the scope to include 100,000 residents and used a total of 20 million yuan. That Suzhou distribution coincided with the shopping event on December 12, often called “Double Twelve,” allowing winners to use the funds for purchases on major online platforms such as JD.com; that option will not be available in the Shenzhen trial.
One notable difference between the Suzhou and Shenzhen pilots is the treatment of offline payments. The Suzhou trial initially included an offline “touch-to-pay” feature, but reports after the exercise indicated that the function experienced some issues. As a result, the offline touch-to-pay option will not be enabled in the upcoming Shenzhen trial. Beijing Business Today reported that the Suzhou testing revealed technical shortcomings in the offline payment capability, prompting its exclusion from the latest pilot.
Overall, these staged pilots aim to test distribution mechanisms, merchant acceptance, and user behavior as China advances its digital currency rollout. By distributing digital yuan through targeted lotteries and enabling spending across vast numbers of participating merchants, authorities can observe real-world usage patterns and identify technical or operational problems before scaling up the program. The Shenzhen trial’s focus on controlled, trackable red-packet distributions and its large merchant network will provide further data on how the digital currency performs in everyday commerce.
Previous rounds highlighted different aspects of the CBDC’s deployment: the initial Shenzhen trial focused on in-person spending at neighborhood outlets, while the Suzhou test combined both online and offline scenarios tied to a major retail event. Lessons learned from those pilots — including the decision to suspend the offline touch-to-pay feature for now — will inform refinements to the system and the design of future tests.
As the pilots continue, observers will watch for how smoothly digital yuan transactions are processed, the extent of merchant participation, and public uptake among citizens. These findings will be important for policymakers and payment system operators working toward a broader and more robust CBDC implementation across China.