Bank of China, one of China's largest state-owned banks, is testing a new offline payment method linked to SIM cards for digital yuan, or the e-CNY, the country’s in trial central bank digital currency (CBDC).
Bank of China has partnered with telecommunication operators China Telecom and China Unicom to start testing the new feature on Tuesday, the bank said Monday in a social media post.
The bank intends to allow users to make payments with their phones by connecting its e-CNY app with what it calls “super SIM cards” that are equipped with a near-field communication function. Users would only need to bring their mobile phones close to point of sales terminals to pay. That means payments can be processed even with a phone turned off.
Such SIM card payment features, however, will only be available on certain Android phones in some pilot areas in China, the bank said.
Digital yuan pilots
The People’s Bank of China (PBOC), the central bank, has been testing a so-called CBDC and rolled out a pilot e-CNY app in January last year.
The PBOC has expanded its digital yuan pilot to at least 26 locations in 17 provincial-level cities and regions, including Beijing, Shanghai, Shenzhen and Suzhou, state media Xinhua reported in April.
The HKMA, Hong Kong’s de facto central bank, said in a September consultation paper that it will explore the possibility of cross-border payments linking e-CNY and e-HKD.
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