China Ready To Use Digital Yuan For Public Transportation Payments

China will soon expand the use of digital yuan. (Photo; Doc. Antara)

JAKARTA - The Chinese government has reached a new stage in testing its digital central bank currency (CBDC) digital yuan or known as e-CNY. This time, they have launched e-CNY payments in public transportation, providing new options for citizens to use digital yuan on their daily trips.

Cities such as Guanzhou, Ningbo, Chengdu, and Beijing are among the first to adopt e-CNY payments.

For passengers who want to use e-CNY to pay for a bus or subway trip, they need to download an e-CNY application, deposit funds, and scan a QR code located at a payment place on a bus or subway.

Chengdu, the capital of Sichuan Province, became the first city in China to present e-CNY payments across its public transportation systems, including buses and subways. Beijing and Suzhou have also announced similar decisions.

According to Zhaosheng Jiang, director of the Beijing-based Blockchain Research Center for 01 Finance, adaptation of the transportation system is an important step in the operational stage of digital RMB. This step further expands the coverage of the use of digital RMB, which is a step forward for China in adopting digital currency technology.

This development is part of China's ongoing testing of e-CNY. The Chinese government has significantly expanded its use of CBDCs this year, despite concerns over privacy.

Authorities, led by the People's Bank of China, believe that e-CNY has the potential to drive regional economic growth. Therefore, they began implementing digital yuan as a payment method in various sectors.

For example, residents in Shenzhen, one of the first cities to adopt e-CNY, could use this digital currency to pay taxes and city fees. In addition, the city government has distributed 30 million digital yuan in an effort to increase the use of e-CNY and encourage consumer consumption.

In addition to public transportation and the financial sector, the Chinese government has also decided to use e-CNY smart contracts in basic education. Through an ongoing trial project, they are exploring the potential benefits of e-CNY smart contracts in this sector.

In this scenario, parents pay tuition fees to private educational institutions using e-CNY, and these costs will be divided proportionally. This smart contract provides the possibility for parents to get refunds if their children miss lessons.

With the launch of e-CNY payments on public transport and growing adoption, China is strengthening its position as a leader in the use of digital currencies. Despite concerns over privacy, Chinese authorities continue to strive to advance this CBDC technology to boost economic growth and improve public services.