FameEX Hot Topics | Bank of China Broadens Digital Yuan Testing to Include SIM Cards and NFC Payments

The Bank of China, in collaboration with China Unicom and China Telecom, has announced a strategic partnership aimed at testing SIM cards and near-field communication (NFC) payments linked to the digital yuan, also known as the e-CNY or renminbi. This move represents another step forward in the development of China's central bank digital currency (CBDC) infrastructure. Initially, the pilot program will be limited to selected users and specific regions, with compatibility limited to Android smartphones.

The Bank of China plans to leverage this partnership to explore new possibilities and enhance the functionality of the digital yuan. The SIM card hardware wallet, referred to as a "hardware wallet" by the bank, allows users to install a designated SIM card issued by a telecommunications operator, log in to the Digital Renminbi app, and activate the SIM card hardware wallet. Users will be able to access their digital yuan balance seamlessly from both their main wallet and the SIM card hardware wallet, eliminating the need for separate top-ups and providing a more user-friendly and convenient payment experience. Furthermore, the hardware wallet supports offline payments, adding to its versatility.

The Bank of China emphasizes its dedication to capitalizing on the potential of SIM card hardware wallets and expanding the applications of the digital yuan. It plans to explore practical use cases in various industries, including but not limited to rail transportation, everyday consumption, academic settings, online shopping, utility payments, business retail, and educational training. By embracing the Internet of Things (IoT) trend, the bank aims to empower SIM cards, enabling them to interact with a vast array of IoT devices.

China has been actively promoting the adoption and integration of the digital yuan. Before 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 at the end of June. Currently, there are 11 countries that have launched their own Central Bank Digital Currencies (CBDCs), and research indicates that 130 countries, representing 98% of the global gross domestic product, are considering the implementation of CBDCs. Notably, China's CBDC pilot test has reached a population of 260 million, covering a wide range of economic scenarios.

As the Bank of China expands its testing of the digital yuan with SIM cards and NFC payments, it marks another milestone in the ongoing development of China's CBDC infrastructure. The strategic partnership with China Unicom and China Telecom highlights the bank's commitment to driving innovation and exploring practical applications for the digital yuan across various sectors. With the integration of SIM cards and the Internet of Things, the digital yuan has the potential to become even more pervasive and transformative in China's digital economy.

Disclaimer: The information provided in this section is for informational purposes only, doesn't represent any investment advice or FameEX's official view.