For now, the e-CNY app has a limit of 500 yuan ($77) per transaction and 10,000 yuan ($1,540) per day for offline payments.
The Bank of China is cooperating with China Telecom and China Unicom, two of the country’s major telecom operators, to enable offline transactions for the digital yuan via SIM cards. The move forms part of China’s broader push to digitalize cash and coins in circulation. It was announced on July 10 with trials commencing immediately the next day.
How China is Conducting the Trials
Per the announcement, the initial phase of the trials will involve only specific Android phones. Again, it will only take place in specific regions, including Beijing, Shanghai, Shenzhen, Chengdu, and Suzhou.
Users will be able to make payments with the digital yuan even without a bank account or an internet connection. To allow this, the trial combines the digital yuan app with specialized “super SIM cards” possessing near-field communication capabilities.
For now, the e-CNY app has a limit of 500 yuan ($77) per transaction and 10,000 yuan ($1,540) per day for offline payments. Users simply need to bring their mobile phones near the point of sale terminals or tap a QR code. Likewise, it will be possible to make payments without needing to turn the phone on.
In the future, the bank plans to expand the scope of the trial and explore additional use cases for the offline payment system.
China’s Progress with Its Digital Yuan Development
China’s digital currency project has been in the works since 2014 when the People’s Bank of China (PBoC) established a research team to explore the feasibility and benefits of a CBDC. The digital yuan was the product of that effort.
The digital yuan is designed to be a legal tender that is backed by the central bank and can be used on various platforms, including online apps and offline devices. The PBoC has also introduced features such as programmability through smart contracts and controllable anonymity to ensure compliance and innovation.
As it stands, China appears to be leading the race for CBDC deployment globally. In 2022, the nation launched a trial of the e-CNY app. More recently, it expanded the usage of the digital yuan through the Belt and Road Initiative and cross-border trades. In Guanzhou, it is now possible to pay for public bus rides with the digital yuan. The nation also plans to extend digital yuan usage to pay taxes and utility services in the city in the future.
Despite its early successes, the digital yuan will face competition from existing payment platforms such as Alipay and WeChat Pay. However, the PBoC hopes to increase its influence by making the digital yuan a more secure, convenient, and inclusive alternative. The offline payment alternative is an innovative project to achieve this and the success of the trial will determine a lot.
nextBlockchain News,
Cryptocurrency news,
News
An experienced writer with practical experience in the fintech industry. When not writing, he spends his time reading, researching or teaching.
Thank you!
You have successfully joined our subscriber list.
https://techgizmohub2023.com/bank-of-china-launches-offline-payment-trial-for-digital-yuan-tech-gizmo/
