Bank of China trials offline payments for digital yuan via SIM cards
Bank of China, one of the largest state-owned banks in China, is currently conducting trials for a novel offline payment system that connects to SIM cards. This payment method is designed specifically for the digital yuan, also known as the e-CNY, which is China's central bank digital currency (CBDC) currently being tested.
This announcement was made by the bank on Monday in a social media post, revealing their partnership with telecommunication operators China Telecom and China Unicom and their intention to commence testing on Tuesday.
The bank plans to enable users to make phone payments by integrating its e-CNY app with specialized "super SIM cards" that have near-field communication capabilities. Users simply need to bring their mobile phones near the point of sale terminals for payment, eliminating the need for the phone to be turned on.
This integration allows transactions to be processed even when the phone is powered off. However, the bank stated that these SIM card payment functions will only be accessible on specific Android phones in a few test regions of China. In January of last year, the People's Bank of China (PBOC), the country's central bank, launched a trial version of an e-CNY app.
This follows China's recent initiative to expand the use cases for its central bank digital currency for its Belt and Road Initiative and cross-border trades. The new experiment plans to extend digital yuan usage to pay taxes and utility services in the city in the future.
In the Chinese city of Guanzhou, it is now possible to pay for public bus rides with the digital yuan CBDC on 10 transit routes, which is a first for the country. To do so, passengers simply need to download the e-CNY app, deposit funds and scan the QR code
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