China’s central bank, the People’s Bank of China (PBOC), has confirmed its intention to continue and expand the pilot program for its central bank digital currency (CBDC), the digital yuan. The digital yuan is currently undergoing a pilot program that has been expanded to 17 more provinces across China, with the PBOC focusing on creating a system that allows consumers to “scan with one code.”
The PBOC has been working to increase the presence and utility of the Digital Yuan and has now introduced two key features: offline payments and smart contract capabilities. The offline payment feature, which launched on January 23, allows users to make payments without an internet connection or power source using NFC technology to confirm transactions. The smart contract feature added to the e-commerce app Meituan will enable users to participate in daily prize draws worth $1,312.
In addition to these features, the PBOC has also announced plans to offer wealth management products that accept digital yuan payments in pilot provinces. China Galaxy Securities, a major investment bank, will offer these services to a select group of customers, with the potential for wider availability in the future.
The PBOC hopes to continue expanding the pilot program for the digital yuan and making innovative applications of the currency to connect it with traditional electronic payment tools. The central bank has already carried out nearly 30 “red envelope activities” in pilot areas with the goal of promoting consumption and low-carbon travel and is committed to making the digital yuan a payment medium with practical utility for consumers.
The Digital Yuan is a significant step forward for China’s digital payments landscape, and its continued development and expansion hold substantial potential for the future of finance in the country. With 32 provinces now already participating in the pilot program and new features being introduced, it is clear that the PBOC is eager to bring the digital yuan to a full launch and cement its place as a leader in the digital currency space.