Digital yuan, 5G networks boost tech demand during Spring Festival holidays
Published: Jan 28, 2023 09:30 PM
The mascot of digital yuan Photo: VCG

The mascot of digital yuan Photo: VCG

Digital yuan or e-CNY, a component of China's currency, played a major role in stimulating local consumption during the just-ended Spring Festival holidays, a traditional consumption peak season in China, as the digital form of the legal tender develops rapidly.

During the first Spring Festival holidays after China optimized its COVID-19 prevention measures, many local governments handed out coupons in the form of digital yuan to boost consumption.

Wang, a Shenzhen-based white-collar worker, told the Global Times over the weekend that she grabbed a digital yuan coupon worth 68 yuan ($10) during the holidays and spent the money with her friends in a fast-food chain.

"It was very convenient to use. My friends also got the coupons and we happily discussed where to spend the money to celebrate the festival," Wang noted.

In Shenzhen, South China's Guangdong Province, the local commerce bureau handed out consumption coupons worth over 25 million yuan in the form of digital yuan during the Spring Festival holidays.

The e-CNY can be used in scenarios such as catering, travel, entertainment and shopping during the holidays, the bureau said.

"The deep integration of digital yuan with the Spring Festival, one of the most important holidays for the Chinese, can accelerate the public's awareness and promotion of the currency," Wang Pengbo, a senior analyst at consultancy BoTong Analysys, told the Global Times on Saturday.

The difficulty of promoting e-CNY lies in improving its usage frequency and combining it deeply with application scenarios, Wang added.

With the continuous development of technology, and  application scenarios further expanding, the digital yuan is becoming more integrated into people's daily lives and is expected to become a new payment habit.

Chinese consumers have shown rising enthusiasm for the digital currency. Data from Meituan, a China-based e-commerce platform providing life services, showed that digital yuan given out by the Hangzhou government in East China's Zhejiang Province via the platform ahead of the holidays was taken up within 9 seconds.

China has stepped up efforts to promote digital yuan with pilot programs. Since 2017, the country has tested the use of digital yuan in over 10 places from Shenzhen to Shanghai and the Xiong'an New Area, North China's Hebei Province.

The People's Bank of China (PBC), the country's central bank, promised to promote digital yuan pilots in an orderly way in 2023.

The amount of digital yuan in circulation reached 13.61 billion yuan by the end of 2022, data from the PBC showed.

Apart from digital yuan, the technology of 5G is also accelerating its integration into people's daily lives, and it has become one of the important drivers of new information consumption.

Data from China Unicom showed that 5G network traffic increased significantly during the Spring Festival holidays. The nation's 5G daily average traffic increased by about 60 percent year-on-year and the traffic on New Year's Eve reached the highest level, up more than 60 percent on a yearly basis.