Chinese e-commerce firm became the first online platform to accept China's Centralized Bank Digital Currency (CBDC), known as the digital yuan. After a successful beta across four Chinese cities in May — Shenzhen, Suzhou, Chengdu and Xiong’an — China’s central bank, the People’s Bank of China, is now in talks with dozens of private companies to continue expanding its network. A total of 20 million yuan, worth about $3 million, will be up for grabs in a lottery, according to CNBC. Winners will receive a digital red packet envelope via the app containing a maximum of 200 yuan of the digital currency. About 100,000 red packets will be distributed. From a citizen's perspective, the digital yuan will operate like China’s existing commercial digital payment methods like Alipay and We Chat Pay. Users download digital wallets to store their funds, and their QR code can be scanned by payment terminals in shops. The digital yuan is designed to replace cash in circulation, such as coins and bank notes, not money deposited long-term in bank accounts. Commercial banks will have a role in distributing the digital currency to users, and to do so they must deposit exactly the same amount of their reserves with the PBOC as the digital yuan they distribute. Widespread use of the digital yuan would give Chinese policy makers greater visibility into how money flows around China’s economy.