The bank intends to integrate its digital yuan app with specialized “super SIM cards” with near-field communication capabilities to let consumers make phone payments.
An innovative offline payment system that connects to SIM cards is currently being tested by The Bank of China, one of the biggest state-owned banks in the nation. The digital yuan (CBDC), which is the central bank of China’s digital currency, may only be used via this payment method.
The bank started testing the next day after announcing its collaboration with telecom companies China Telecom and China Unicom on July 10. By combining the bank’s digital yuan app with specific “super SIM cards” equipped with near-field communication capabilities, the goal is to enable consumers to make payments using their mobile phones.
![Bank of China Trials Offline Payments for Digital Yuan via SIM Cards image 109](https://i0.wp.com/nosisnews.com/wp-content/uploads/2023/07/image-109.png?resize=779%2C512&ssl=1)
![Bank of China Trials Offline Payments for Digital Yuan via SIM Cards image 109](https://i0.wp.com/nosisnews.com/wp-content/uploads/2023/07/image-109.png?resize=779%2C512&ssl=1)
With this integration, consumers can do transactions without turning on their mobile phones by simply moving them close to the point-of-sale terminals. Notably, these SIM card payment features will first be available on particular Android phones in particular Chinese test zones. The experimental version of the digital yuan app was first released by the People’s Bank of China, the nation’s central bank, in January 2022.
China’s initiatives to increase the CBDC’s use cases are in line with its goals for the Belt and Road Initiative and international trade. The utilization of the digital yuan is intended to go beyond offline payments, with plans to include tax payments and utility services across the nation.
Related: BNP Paribas teams up with Bank of China to promote digital yuan usage
In Guangzhou, where ten transit routes currently accept payments in the form of the digital yuan, this is one specific instance of the use of the currency. The digital yuan app must be downloaded, money must be deposited, and then passengers can pay for their journeys by scanning the QR code located in the bus payment area.
These recent events show China’s development in promoting and putting the CBDC into practice on numerous levels. China wants to promote widespread adoption and usage of the digital yuan within its domestic economy. To do this, it will exploit the capabilities of offline payments by integrating SIM cards and increasing the use of the currency in public transit.