China is seeing additional developments in its digital yuan soft rollout, as the country’s central bank continues to ramp up pilot tests and is expected by many to fully deploy the e-CNY in time for the Beijing Winter Olympics in February.

Sanya, a popular tourist destination in South China’s Hainan province, is set to hand out 28,000 e-CNY red envelopes worth 10 million yuan (US$1.55 million) through a lottery to local residents and tourists from certain provinces, the city government announced in a social media post on Monday.

The winners will be able to use e-CNY at designated offline vendors, according to the post.

Meanwhile, the southern city of Shenzhen has started to test e-CNY adoption for Hong Kong residents. A Hong Kong resident surnamed Liang who has worked in Shenzhen in the past has recently purchased a necklace with e-CNY after bundling her bank card to the system, the People’s Daily reported on Monday.

As the trials of the digital currency continue to gain pace and the idea of central bank digital currencies (CBDCs) catches on around the world, credit rating agency Moody’s Investors Service has warned the wide use of CBDCs in cross-border payments and settlements would be credit negative for banks due to lower fees and commissions.

While China looks to scale up the tests of e-CNY, the People’s Bank of China (PBOC), the country’s central bank, has teased out some areas to be optimized.

Test runs of e-CNY have seen some great results at the current stage, but “some problems still need to be solved,” Fan Yifei, a deputy governor of the PBOC said on Friday at the China Digital Finance Forum, according to a transcript released by the PBOC.

Regulatory rules, acceptance environments and payment systems should be improved and optimized, Fan said.

The rules for e-CNY should differ from those for physical currency, and the digital currency should not be fully managed by existing account-based methods, according to Fan. “[We have to] break what should be broken and restrain what should be restrained,” he said.