One of the biggest state-owned banks in China, the Bank of China, has been developing and conducting trials for an offline payment system that would be connected to the user’s SIM cards. This method of payment has been designed specifically for the digital yuan- which is the central bank’s digital currency for the country.
The announcement made on the 10th of July revealed the partnership the bank had with China Telecom and China Unicorn, a couple of telecommunication operators, along with its intention of commencing testing just the next day. The bank also has plans of enabling its users to make payments through their phones by first integrating the digital Yuan app with their super SIM cards with near-field communication capabilities. All users would have to do was bring their mobile phones close to the point-of-sale terminals for payments, and they wouldn’t even have to switch their phones on.
Bank of China To Allow Digital Yuan Payments
This integration by the Bank of China will allow payments and transactions to be processed even if the phone is powered off. However, the bank has clarified that the SIM card payment functions will be available on a few Android phones in a few test regions of the country. Back in January 2022, the People’s Bank of China- which is the central bank of the country- went on to launch the trial version of this digital yuan app.
The move by the Bank of China does follow the recent initiative by the country to start expanding the use cases for its CBDC which would be a part of its Road and Belt initiative and cross-border trades, with multiple plans of extending the usage of the digital yuan in order to pay taxes, as well as utility services in the country itself. In the city of Guanzhou, it has been made possible for one to pay for their public bus rides through digital yuan on around 10 transit routes.