China Continues To Develop Digital Yuan Capabilities: SIM And NFC Card Trials Conducted

Digital yuan money. (Photo; Doc. Mk)

JAKARTA - The digital currency infrastructure of China's central bank (CBDC) known as digital yuan or renminbi continues to develop. On July 10, the Bank of China announced that China's CBDC is undergoing trials using SIM cards and NFC payments. Testing is currently being carried out on certain groups of users and will be gradually expanded in "selected pilot areas in the near future."

The Bank of China revealed that it has teamed up with China Unicom and China Telecom to strengthen the use of digital yuan towards "new capabilities open." SIM card hardware wallets are referred to as "hardware wallets" by the country's financial institutions.

"Digital profiteers only need to install SIM cards issued by telecommunication operators on their phones, enter the Digital Renminbi application, and activate SIM card hardware wallets," the Bank of China explained in a press release.

The bank added, "During the use of digital renminbi SIM card hardware wallets, the balance will be connected to the main wallet, so that separate refills are not required, and payments will be more convenient and easy to use - A digital commitment SIM card hardware wallet also supports offline payments."

The Bank of China affirms its commitment to promoting SIM card hardware wallets and digital yuan apps. They stated that it will expand the use of e-CNY by exploring various practical applications in various sectors, including rail transportation, daily necessities, academic environment, online shopping, payment of utilities bills, retail and education businesses. In line with the Internet of Things (IoT) trend, the Bank of China seeks to empower SIM cards to deal with a very large number of IoT devices.

Prior to the launch of digital yuan in Jinan, China, for public transportation payments, Shanghai Clearing House also expanded its support for digital currencies by the end of June. The data show that currently 11 countries have launched a Central Bank Digital Currency (CBDC), while 130 countries, which account for 98% of global gross domestic product, are considering implementing CBDC. In China, the CBDC trial covers a population of 260 million people and involves various economic scenarios.

Since the announcement of SIM and NFC card testing by the Bank of China, interest and acceptance of digital yuan has increased. The implementation of this CBDC can provide benefits in terms of payment efficiency and accelerate digital financial transformation in China.