Shenzhen city, China’s southeastern metropolis that connects the mainland to Hong Kong, has started to issue digital yuan hard wallets to Hong Kong tourists but demand has so far failed to meet expectations.
See related article: China’s e-CNY pilot to boost Hong Kong as offshore yuan trading center
Fast facts
- Local authorities in Luohu, a district of Shenzhen on the crossing between Hong Kong and the mainland, installed China’s first digital yuan hard wallet dispenser machines on Feb. 18, which are open only to Hong Kong residents, according to the local government’s social media.
- Luohu launched the project in collaboration with the Bank of China and Octopus Cards, a smart card for payments in Hong Kong. The goal was to issue 50,000 digital yuan hard wallets from Feb. 22 to Mar. 31, but as of Feb. 26, only 625 visitors had taken up the offer, local media reported on Tuesday.
- Visitors from Hong Kong can obtain digital yuan hard wallets from the machines through real-name registration and top them up with Octopus cards. The wallets can then be used for shopping in over 1,400 merchants in Luohu district, where the users get a 20% consumption subsidy from the government.
- Digital yuan, or e-CNY, is China’s central bank digital currency (CBDC) being piloted in at least 26 provinces and cities across the country.
- To help economic recovery after the lifting of Covid-19 restrictions, Shenzhen gave out 100 million yuan (US$14.5 million) in digital yuan during the Lunar New Year earlier this year, which could be used in the city’s restaurants and food businesses.
- Despite China’s effort to promote its CBDC, the project faces adoption obstacles, ranging from limited use cases to competition with other established payment services such as Alipay and Wechat.
See related article: Digital yuan sales during Lunar New Year up from last year, online retailers say