Bank of China tests SIM card NFC payments for e-CNY

This new system aims to allow users to perform payments with their phones by connecting the bank’s e-CNY app with a series of super SIM cards that are equipped with a near-field communication function (NFC). In order to perform these payments, users are only required to move their mobile phones close to point of sales terminals. In essence, the system allows users to perform payments even with a switched-off smartphone. 

The system is part of China’s CBDC pilot testing phase, and it will only be available on certain Android phones in some pilot areas across the country. The People’s Bank of China rolled out the mobile wallet for China’s digital yuan in January 2022. The app was developed by the Digital Currency Research Institute, and it is available on iOS and Android app stores in China. 

According to theblock.co, the bank has expanded the digital yuan pilot to at least 26 locations in 17 provincial-level cities and regions, including Beijing, Shanghai, Shenzhen and Suzhou.

Other noteworthy e-CNY developments

China has been exploring a potential digital currency since 2014. However, the first actual test of the e-CNY system was launched in 2020 with an initial trial launch in Shenzhen, Suzhou, Chengdu, and Xiong'an. 

In July 2023, the Chinese branch of Singapore-based DBS Bank has launched an e-CNY merchant collection solution to support the growing consumer usage of China’s CBDC. DBS also became the first foreign bank in China to complete an e-CNY transaction for a client.  

This e-CNY merchant collection solution allows corporate clients of DBS China to collect payments from their customers in China’s central bank digital currency (CBDC). These corporate clients can also benefit from automated e-CNY settlement directly into their CNY bank deposit accounts. 

In May 2023, the Bank of China partnered with France-based bank BNP Paribas to promote the digital yuan to corporate clients. The primary goal of this collaboration was to allow BNP Paribas China’s corporate clients to link up with the BOC system.  

This allowed users to manage their digital yuan wallets by connecting them to their bank accounts, tracking transactions, and making payments using China’s digital currency via an e-CNY management system. The management system can also make it easier for clients to use digital cash for real-time transactions.