undefinedDec. 5 saw the Suzhou Municipal Government along with the People's Bank of China announced that people could make an appointment about the pilot program related to digital yuan lottery. Combined with the "Double Twelve Suzhou shopping festival", a total of 20 million yuan ($3 million) will be up for grabs in a lottery to all eligible Suzhou citizen. A total of 100,000 digital red packets, each containing 200 yuan ($31), will be distributed to residents on Dec. 11. 

This is another public pilot after the digital yuan red packets in Shenzhen. Compared with the previous pilot, it now has four main changes: there are many red packets so the total amount is larger and the support for merchants is wider. Online consumption can be carried out, in addition to consumption at designated offline merchants. Also, you can shop on JD.com - a Chinese e-commerce platform. The feature of "dual offline" payment can be offered. What's more, Bank of Communications and Postal Savings Bank of China are included in it.

It is reported that residents can use their digital yuan to purchase in nearly 10,000 businesses, covering daily retail, catering consumption, and life services, to achieve coverage of core business circles and key supermarkets in all sectors. In addition, some who participated in the lottery will be selected to participate in offline wallet experience activities.

Although the Suzhou digital yuan red packets boast more complete functions to more use cases, it is only aimed at local people in Suzhou. As per the statement, this event is just a routine test in the digital yuan research and development process, and does not mean that the digital yuan has officially released.

More partners get involved in it
Suzhou's choice to cooperate with JD.com for public testing has also attracted a lot of attention. Its app was also the exclusive release platform for Beijing's tens of billions of consumer coupons this year.
 
According to previous report, the Digital Currency Research Institute of the People's Bank of China has teamed up with many Internet firms such as Didi Chuxing, Meituan, Bilibili, ByteDance, etc. to promote the ecological development of digital yuan in diversified application scenarios.

So, will WeChat and Alipay be included in the development of digital yuan? Judging from the current statements and public actions of all parties, WeChat and Alipay will be connected to the digital yuan system. For these two platforms, the biggest challenge is how to deal with other wallets or platforms to grab market share.

The digital yuan wallet brings new payment methods and experiences, while new opportunities and challenges are given to payments business of commercial banks. Therefore, it remains unclear whether digital yuan is possible to change the payments landscape.

This progress allows developers to find and address issues
The use of digital yuan, first of all, further reduces the cost of online payments and settlement using digital means, and relieves the burden on merchants, especially small and micro merchants. It is an important link in China's promotion of inclusive finance. Secondly, it brings novel challenges and opportunities to the market.undefined
The market condition that the People's Bank of China is currently facing has undergone great changes. Among them, the electronic currency and society's cashless trend are becoming more and more obvious. Now the digital yuan may no longer have to consider anti-counterfeiting issues like bank notes, but how to prevent technical risks related to the Internet and databases like attacks from bad actors. At the same time, different types of fraud should be taken into consideration. 

The biggest risk also lies in whether the technology is complete and there are loopholes or security risks in applying the new technology. At present, the People's Bank of China prudently promotes the testing of digital currencies, which is also based on this principle, gradually discovering risks and enhancing technologies in the process.

DCEP gives impetus to cross-border retail consumption
Dec. 4 witnessed Yu Weiwen - President of the Hong Kong Monetary Authority - wrote an article that the Monetary Authority and the People's Bank of China Digital Currency Research Institute are now studying the use of digital yuan for cross-border payments, and make corresponding technical preparations. Although there is no timetable for launching digital yuan, it is believed that it will provide more payments options for residents of the two places who need to conduct cross-border retail consumption.

Currently in China's cross-border payments market, participants can be divided into three main categories according to the nature of the enterprise: traditional banks and institutions, third-party payments institutions, and international payments institutions. Among them, traditional banks and remittance institutions have been deeply involved in the cross-border payments industry for many years; international payments institutions, represented by payment giants such as PayPal, have more overseas resources and advanced financial technologies.

In addition to the current technical problems to be improved, DCEP's cross-border payments system also faces regulatory risks in that once it can be freely exchanged globally, it means that international fluid capital can easily obtain the domestic currency, and the issuing countries are extremely vulnerable to be attacked by international speculators.

Against the backdrop of actively promoting internationalization, DCEP can give impetus to the reminbi internationalization. China is gradually getting involved in international economic activities, deepening cooperation and exchanges with other economies, and enhancing China's voice in subdivided industries and fields. All these moves make it feel that there is a growing demand for China to promote the renminbi internationalization.