Chinese bank begins testing offline payments for the digital yuan

One of China’s largest state-owned banks, Bank of China, is testing a new offline method for paying with the digital yuan (e-CNY) linked to SIM cards.

As part of the initiative, the institution has partnered with telecom operators China Telecom and China Unicom.

Users will be able to make payments by linking the national digital currency app to SIM cards equipped with NFC technology. This means payments can be processed even when the device is switched off.

Initially, the feature will be available on Android phones and only in certain regions of China.

The PRC has been testing the digital yuan for three years. By the end of 2021, the volume of e-CNY reached 87.57 billion yuan (~$13.68 billion), with 261 million unique digital wallets registered.

Trials were conducted in Shenzhen, Suzhou, Xunyane, Chengdu, Shanghai, Hainan, Changsha, Xi’an, Qingdao, Dalian and the Olympic zones. The aforementioned cities will continue to use the instrument.

In April 2022, former head of the People’s Bank of China Zhou Xiaochuan noted that e-CNY is primarily intended for the general public and merchants, and not to replace SWIFT or “turn the currency into a weapon”.

Since May 2023, government employees in Changshu have begun receiving salaries in the digital yuan.

In July, the authorities of the city of Jinan implemented the ability to pay fares with digital yuan on all bus routes and launched a program to incentivize the use of the technology.