Bank of China, one of the leading state-owned banking giants, is now piloting a ground-breaking offline payment system that ties in with SIM cards. Designed expressly for the digital yuan or e-CNY – the central bank digital currency (CBDC) China is currently exploring – this system holds promise for a more flexible and robust digital currency ecosystem.
The news was shared by the bank on Monday via a social media post, unveiling its collaboration with telecom giants China Telecom and China Unicom. The trial was slated to start the next day, marking a significant step forward in China’s digital currency trajectory.
This innovative payment solution aims to merge the bank’s e-CNY app with unique “super SIM cards” equipped with near-field communication capabilities. These cards will empower users to perform payments simply by bringing their mobile phones in proximity to point of sale terminals. Interestingly, the system works without requiring the phone to be switched on, enabling offline transactions.
The bank clarified, though, that the SIM card payment functions would initially be available only on certain Android phones in selected testing zones within China. This move comes after the January 2022 trial launch of an e-CNY app by the People’s Bank of China (PBOC), which signaled the country’s central bank’s intent to explore and expand in the digital currency realm.