China Makes Digital Yuan Transfers Possible By Touching Phones Together

With trials of the digital yuan currently happening in China, the country is testing new expansions for the new technology. And one of them is a feature that works when people put together their smartphones and touch them together in order to send money to one-another without having access to an internet connection or any other similar means, and this is expected to help the spreading of the new currency in the majority of payment services.

In a test of this new function, up to 1,000 people in Suzhou will take part. The outcome that is being expected is to make people feel like they’re exchanging paper money. Phones that support the feature are being rolled out by Huawei. And a major point of notice is that this technology can be used even without even having an internet connection.

If the testing trials prove to be successful, it would be a turning point for China and bring them a lot closer to their main goal which is the major launch of the new technology by the time the Winter Olympics are bound to take place in February of 2022. 

100,000 people will be given 200 yuan ($31) each, in the Suzhou pilot program, and this cash can be spent in products at stores in the city. The currency can also be used for purchase on e-retailer, which will be the first online e-retailer platform that will accept it.

When undergoing trial the two elements that will be tested are the performance of the platform and the handling of the payments under heavy stress. Online retailers offer big discounts on Dec. 12 because of a shopping event that is called “Double 12” — and this usually makes people eager to shop and consequently it brings a high number of orders from the beginning of the day at midnight .

Other major cities are also moving along with the tests. In Chengdu, a wallet app that can freely convert cash into digital yuan is downloaded by people that are invited by employees at major banks. They can spend the currency in local supermarkets or at local shops and stores, and to pay bills for their smartphone services.

In mid-October, the first digital yuan trial involving the general public launched in Shenzhen. More than 47,500 people were given 200 yuan each, which they can use at restaurants and stores. After testing such applications as transfers from person to person, taxes and utilities and online retail, China’s central bank is aiming for the major launch for the Olympics of 2022.

A city in Hebei Province called the The Xiong’an New Area, now lets customs authorities accept security deposits from importers in digital yuan. Technical trials of cross-border payments using the currency have been launched by The People’s Bank of China and the Hong Kong Monetary Authority.

In addition to the testing that is being done in major cities in China, the country has also been working on the technology’s legal groundwork. In October, they released the draft legislation to make the digital yuan legal tender.

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