The Bank of China is testing an offline payment system that connects to SIM cards for China’s central bank digital currency (CBDC), the digital yuan.
Bank of China Partners With China Telecom and China Unicom for the Trials
The Bank of China is testing an offline payment system that connects to SIM cards for China’s central bank digital currency (CBDC), the digital yuan.
The bank has worked with telecom companies China Telecom and China Unicom for the trials, which include connecting the digital yuan app with specialized "super SIM cards" with near-field communication (NFC) capabilities.
Transactions can still be executed even when the phone is off, and users merely need to bring their mobile phones close to the point of sale terminals to make a purchase.
Only some Android phones will be able to use the SIM card payment features in a small number of China's test zones. Since the debut of the digital yuan app in January 2022, the pilot programme has spread to at least 26 places throughout 17 provincial-level cities and regions, including Beijing, Shanghai, and Shenzhen.
As part of its Belt and Road Initiative and cross-border trade, China intends to broaden the CBDC's use cases. It also hopes to allow the use of the digital yuan to pay for domestic taxes and utility services.
