July 12, 2023

Bank of China Tests Technology To Allow Users Pay with Sim Cards in Digital Yuan

Digital Yuan

Digital Yuan

The Bank of China, one of the largest state-owned commercial banks in China, is testing new technology through which citizens use their sim cards to pay in digital yuan, China’s central bank digital currency (CBDC), according to The Block Website.

In a statement, the bank said it is collaborating with telecommunication operators China Telecom and China Unicom to develop this technology to test it this week. Users will be allowed to make payments by their phone after connecting its digital yuan app with what it calls “super SIM cards” that are equipped with a near-field communication function.

When the user pays at the merchant, there is no need to scan the code or call out the QR code. That means that the payment can be done even if the users’ mobiles are off.

The new service will be launched in some pilot areas and will be promoted to other pilot areas in stages (currently only Android phones with NFC function support the use of SIM card hard wallets), the bank added.

China is trying to promote the use of the digital yuan in different ways. This month, the Jinan Public Transport in Shandong Province updated all its card readers and bus route software to allow passengers to pay for their tickets using CBDCs.

It is worth mentioning that the civil servants of the Chinese city of Changshu got their May salaries in digital yuan, according to a notice issued by financial authorities in the city.

The notice said that all civil servants, including those in state-owned units, public service, and public institutions at all levels, would be paid in digital yuan starting the next month.

In addition, civil servants have the option to opt for digital yuan settlements through self-service terminals.

During the Spring Festival holidays, Chinese cities, such as Lianyungang, Jinan, and Shenzhen, launched nearly 200 digital yuan activities worth more than 180 million yuan ($26.6 million) to promote its usage.

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