Bank of China trials offline payments for digital yuan via SIM cards

The Financial institution of China, one of many largest state-owned banks in China, is presently conducting trials for a novel offline fee system that connects to SIM playing cards. This fee technique is designed particularly for the digital yuan — China’s central financial institution digital foreign money (CBDC).

The July 10 announcement revealed the financial institution’s partnership with telecommunication operators China Telecom and China Unicom, and its intention to begin testing the subsequent day.

The financial institution plans to allow customers to make cellphone funds by integrating its digital yuan app with specialised “tremendous SIM playing cards” with near-field communication capabilities. Customers merely have to carry their cell phones close to the purpose of sale terminals for fee, eliminating the necessity to flip the cellphone on.

This integration permits transactions to be processed even when the cellphone is powered off. Nonetheless, the financial institution said that these SIM card fee capabilities will solely be accessible on particular Android telephones in a couple of take a look at areas of China. In January 2022, the Folks’s Financial institution of China — the nation’s central financial institution — launched a trial version of the digital yuan app.

This follows China’s latest initiative to broaden the use cases for its CBDC as a part of its Belt and Highway Initiative and cross-border trades, with plans to increase digital yuan utilization to pay taxes and utility providers within the nation.

Within the Chinese language metropolis of Guanzhou, it’s now doable to pay for public bus rides with the digital yuan on 10 transit routes. To take action, passengers merely have to obtain the digital yuan app, deposit funds and scan the QR code within the bus fee part to pay for his or her experience. 

Associated: Chinese city of Jinan accepts CBDC payments for bus rides

In the meantime, Hong Kong launched an e-HKD pilot program in Might after the Hong Kong Financial Authority (HKMA) released a white paper in October 2021 on a possible retail CBDC. The HKMA, Hong Kong’s de facto central financial institution, mentioned in a September 2022 session paper that it’ll explore the potential for cross-border funds linking digital yuan and the e-HKD.

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