In a collaboration between Bank of China, China Unicom, and China Telecom, the state-owned financial institution has announced its initiative to conduct trials on SIM cards and near-field communication (NFC) payments linked to the renminbi. The pilot program, which is currently limited to Android phones, will be implemented in specific user groups and geographical regions, as explained by the Bank of China.
China Expanding Digital Yuan Adoption To SIM Cards And Contactless Transactions
China’s CBDC, known as the “e-CNY” or digital yuan, continues to witness advancements in its infrastructure. Recently, on July 10, the Bank of China announced the commencement of testing the country’s CBDC with SIM cards and NFC payments. Initially, the testing phase will involve selected users and will gradually expand to “selected pilot areas in the near future.”
To enhance the capabilities of the digital yuan, the Bank of China has collaborated with China Unicom and China Telecom. The state-owned financial institution refers to the SIM card hardware wallet as a “hardware wallet.” According to a press release by the Bank of China, “Digital renminbi users only need to install the SIM card issued by the telecommunications operator on their phones, log in to the Digital Renminbi app, and activate the SIM card hardware wallet.”
The bank added:
The digital renminbi SIM card hardware wallet simplifies payments by seamlessly sharing the balance with the main wallet. This eliminates the necessity for separate top-ups and enhances convenience and user-friendliness. Additionally, the digital renminbi SIM card hardware wallet supports offline payments, further enhancing its versatility.
The Bank of China has reaffirmed its dedication to leveraging the potential of SIM card hardware wallets and exploring diverse applications of the digital yuan. The bank aims to expand the horizons of its e-CNY initiative by investigating practical implementations across various industries. These industries encompass a wide range of sectors, such as rail transportation, everyday consumption, academic institutions, online shopping, utility payments, business retail, and educational training. Embracing the growing Internet of Things (IoT) trend, the bank aims to empower SIM cards to cater to a vast number of IoT devices.
Prior to the introduction of the digital yuan for public transportation fares in Jinan, China, the Shanghai Clearing House had already extended its support for the digital currency by the end of June. Currently, data reveals that 11 countries have launched their own Central Bank Digital Currencies (CBDCs), while research indicates that 130 countries, accounting for 98% of the world’s gross domestic product, are contemplating the implementation of CBDCs. In China, the CBDC pilot test encompasses a population of 260 million, covering a diverse range of economic scenarios.