The new feature allows customers of the yuan payment application to continue to make offline transactions while using the central bank digital currency (CBDC) from their Android NFC smartphone or device, even if it has no power at that specific moment.
This will work once the customers have activated the `tap and pay` feature in the application. Furthermore, the users can set a preferred payment limit on the number and the value of digital yuan payments that can be done from their personal smartphones, even when it has no more battery life or there is no internet connection available.
Customers can also find the payment-without-internet-or-power-function in the setting of the app. In order for the payments to be made, a verification code needs to be entered on the device, after the transaction exceeds the code-free quota. Even then, the payment will proceed only if it passes the system’s check.
Local reports do not specify if the function uses the NFC technology provided by the smartphone, but PBOC has tested offline NFC smartphone payments, along with the NFC `hard wallets` or NFC wearables. Both of the products allow clients to make contactless NFC payments without the need of a digital wallet or a mobile phone. The payments can be done in-store and online, with China’s digital currency, the digital yuan (e-CNY).
In the case of a lost device, the owner can log into the application on another mobile phone and have the possibility to suspend the payment-without-power function, in order to save their funds and protect the phone from fraud.
According to officials of Yicai Global, this new feature is available on Android mobile phones, and it will also be available on other handsets as well in the future.
People’s Bank of China’s development strategy
The PBCO is responsible for carrying out the important monetary policies and regulations of financial institutions in mainland China, issuing the renminbi and administering its circulation around the country, managing the state treasury as a fiscal agent, as well as maintaining the renminbi exchange rate at adaptive level, while holding and managing the state foreign exchange and gold reserves.
In 2022, as claimed by the China Banking News, the PBOC announced that it applied for a patent on an automatic teller machine (ATM) and a cash deposit machine (CDM) for digital renminbi currency.
The bank’s Digital Currency Research Institute, ShenzhenYihua Computer Tech, Shenzhen Yihua Computer Share, and Shenzhen Yihua Shidai Tech submitted an application for a patent on a digital renminbi ATM/CDM at the beginning of 2022.
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