China working on CBDC guide to make digital yuan more accessible to foreign users

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As China works its way toward a full-scale launch of the digital yuan, government officials are exploring various options to trigger higher adoption metrics, the latest of which is a how-to guide for tourists.

The People’s Bank of China (PBoC) and its Digital Currency Research Institute have
published a guide for tourists seeking to use its central bank digital currency (CBDC).

The guide, published in mid-March, forms part of a list of initiatives from China’s banking regulator in recent months. The guide urges tourists to download the official digital yuan mobile app and select an authorized operator supporting international service.

Tourists can create digital yuan accounts using their mobile phone numbers with support from over 210 countries. The onboarding process is further simplified as visiting tourists can open a CBDC wallet without maintaining a bank account with the authorized operation.

“You don’t need to visit a bank counter, provide passport/other identity information, or hold a bank account in mainland China if opening the anonymous wallet(s),” read the guidance.

Apart from the ease of creating accounts, the PBoC’s latest guide confirms seamless digital yuan top-up alternatives for tourists. Following a 2023 update, tourists can fund their digital yuan accounts with either Mastercard (NASDAQ: MA) or Visa (NASDAQ: V) payment alternatives at the push of a few buttons.

The guidance confirms that tourists can visit authorized operator’s bank counters to top up their wallets and exchange yuan or foreign currency notes for the CBDC. While the topping-up process may incur charges, Hong Kong tourists can simply top up their digital yuan wallets via the Faster Payment System (FPS) for free.

Users who link their international bank cards to the digital yuan mobile app can pay for goods and services using the CBDC without topping up in advance. There is also the option for tourists to explore hardware wallets and digital yuan cards to improve their payment experiences.

Other perks to improve user experience include a customer-presented QR code for payments, tap-to-pay functionality to support offline payment and robust support for e-commerce.

Fierce competition on the Mainland

While the PBoC is pulling strings to onboard international users to the CBDC, the digital yuan still faces stiff competition from existing payment options. Currently, the digital yuan is competing against AliPay, WeChat and UnionPay as payment alternative for tourists with a clear first-mover advantage.

To level the playing field, the PBoC is planning to introduce several functionalities for the digital yuan, including use cases in securities, programmability, and cross-border payment capabilities.

“First thing to be upgraded is the payment tool used in retail scenarios, that is, digital renminbi is used as the payment tool in all retail scenarios,” Changchun Mu, head of digital currency research at the PBoC, said in 2023.

To learn more about central bank digital currencies and some of the design decisions that need to be considered when creating and launching it, read nChain’s CBDC playbook.

Watch: Blockchain provides perfect foundation for CBDC