(Yicai Global) Feb. 24 -- Chengdu has become the fourth city in China and the first in its inland Western region to pilot the country’s sovereign cryptocurrency.

CNY40 million (USD6.2 million) of virtual yuan will be circulated in the form of digital red envelopes, also known as ‘Hongbao’ which are traditionally used in China when gifting cash, over the next few days. CNY30 million of this comes from the Chengdu government and CNY10 million from e-commerce giant JD.com.

Chengdu is offering more digital yuan than the other three cities, Beijing, Suzhou and Shenzhen, which have also run trials, and the most red packets. Some 200,000 randomly selected people will be gifted Hongbao of CNY178 (USD27.50) or CNY238.

Local residents must apply for the e-yuan red envelopes through an app run by the municipal government or on JD.com’s platform before Feb. 25. Once distributed, winners can use their e-money at over 12,000 brick-and-mortar shops in the city or on the JD.com online marketplace between March 3 and March 19.

Applications are already being accepted, Yicai Global has learned.

The People’s Bank of China has been rolling out tests of the digital currency in a number of cities since last October. Shanghai, Changsha in Hunan province, Qingdao in Shandong province, Dalian in Liaoning province, Xi’an in central Sha’anxi Province and Hainan province are expected to be next in line.

Editor: Kim Taylor