China has enabled smart contract functionality for its central bank digital currency (CBDC), the digital yuan, through the e-commerce app Meituan, one of China’s largest food delivery and lifestyle apps.
China has been at the forefront of CBDC development amid major countries, launching trials for the digital currency as early as 2020. While the currency has been tested in various retail transactions domestically, as well as buying securities, smart contract functionality on a mass retail scale has yet to be tested.
The smart contracts used by Meituan are used to divide up a daily prize of 8,888 RMB ($1,312), according to local media outlet 8btc, which is focused on cryptocurrency and Web3 reports, and other mainstream internet media outlets in China. When a user places an order with the app and pays with the digital yuan, the smart contract is triggered and looks for certain keywords in the list of goods purchased and the merchant name. If a user happens to have some of these keywords, which change daily, the smart contract will allocate a portion of the 8,888 RMB to their digital yuan wallet.
At the end of 2022, the digital yuan accounted for 0.13% of the total circulation of Chinese Renmimbi Yuan, the People’s Bank of China said earlier in January.
The PBOC’s Digital Currency Institute said in September they were working on increasing smart contract functionality, and later rolled out a smart contract-based function that prevents payees from wrongfully taking prepaid funds.
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