China is recruiting the help of Meituan, one of China’s largest food delivery and lifestyle apps, to test out smart contract functionality for its Central Bank Digital Currency (CBDC): the digital Yuan.
China’s CBDC program is one of the most highly developed in the world, as the country started to experiment with the digital Yuan in 2020. So far, the digital currency has been used in retail transactions and to buy securities, but China is yet to test smart contract functionality on a large scale.
To incentivize retail to use the CBDC on Meituan, the government has allowed a daily prize of 8,888RMB ($1,312) to be divided up between users according to local crypto outlet 8btc.
The functionality will work as such: when a user places and pays for an order on Meituan the smart contract will trigger and look for certain keywords in the list of purchased items. If a user has those keywords (which changes daily) the smart contract will reward the users with a portion of the 8,888RMB to their digital wallet.
With this experiment, The People’s Bank of China (PBOC) is working to increase smart contract functionality in CBDC use. The PBOC is also rolling out a smart contract based function that prevents payees from wrongfully taking pre-paid funds.