China digital currency: Beijing forum promotes SIM-based ‘e-CNY hard wallet’ as an alternative for mobile payments
Chinese mobile carriers China Telecom and China Unicom, along with the Bank of China, are promoting a hardware version of the country’s digital currency, known as e-CNY. This SIM-based e-CNY payment service is being positioned as an alternative to existing mobile payment apps.
The central bank digital currency research arm in China has been facing challenges in persuading consumers to use the official e-CNY app or the digital currency wallet embedded in mobile apps. In order to address this, the SIM card-based payment method was presented at a conference in Beijing as a viable alternative.
One of the key advantages of the SIM card wallet is that it enables payments even without an internet connection or battery power. This feature provides flexibility and convenience for users who may not always have access to these resources. The “e-CNY hard wallet” was showcased as a major product at the 2023 China Digital Finance Forum.
The SIM card was launched in July by the Bank of China and the two mobile carriers. It has been tested in various consumer-facing scenarios, including subways and universities, in several Chinese cities. For example, in subway stations in Qingdao and Suzhou, people with e-CNY accounts and SIM cards in their phones can pay their metro fares with a simple tap, even when their phones have no internet connectivity or power.
The Bank of China has highlighted several advantages of the “e-CNY hard wallet”, including improved safety, reliability, and convenience. The use of SIM cards as a secure hardware medium allows customers to make payments anytime and anywhere, reducing costs and enhancing the universality of e-CNY usage.
The 2023 China Digital Finance Forum, with the theme of “integration and evolution: to build a new ecology of digital finance,” was co-organized by various official agencies, including the Beijing Municipal Bureau of Local Financial Regulation and Supervision, the government of Fengtai District in Beijing, and the Digital Currency Research Institute of the People’s Bank of China. The forum showcased other fintech offerings, such as an e-CNY smart contract product and solutions for cross-border e-CNY payments.
The e-CNY trials were launched by the People’s Bank of China at the end of 2019. Cities were selected based on factors such as national development strategies, regional expansion plans, and local industrial and economic considerations. While the technology behind e-CNY remains opaque and it is not minted on a blockchain, it has been made compatible with cross-border programs, such as the mBridge with Hong Kong.
Mu Changchun, the head of the Digital Currency Research Institute, has urged commercial mobile payment providers, including Tencent Holdings’ WeChat Pay and Ant Group’s Alipay, to work towards improving interoperability and unifying quick response (QR) codes for e-CNY payments.
Overall, the promotion of a hardware version of China’s digital currency through a SIM-based e-CNY payment service offers an alternative to traditional mobile payment apps. Its ability to function without an internet connection or battery power makes it an attractive and convenient option for users, potentially driving wider adoption of e-CNY in the future.
