Part 3/8:
China has been at the forefront of CBDC innovation, launching its digital yuan well before many other countries. However, initial adoption levels have been underwhelming, leading Chinese authorities to adopt strategies aimed at increasing user engagement. Introducing an expiration date on digital yuan holdings is one such tactic.
This "use it or lose it" approach is designed to incentivize recipients to spend their digital currency within a certain timeframe, effectively promoting liquidity and circulation within the economy. Unlike physical cash—which does not typically expire—the digital version can be programmed to become worthless if not spent timely, potentially influencing consumer behavior significantly.