Several Chinese cities have started using e-CNY payment methods in their public transport system as part of the next phase of the country’s central bank digital currency (CBDC) pilot testing.
According to a local report by Quinjia, Guangzhou Public Transport has launched the payment method for use in paying bus fares. The city now provides e-CNY QR payment codes that users can scan to pay using the CBDC wallet app.
More than 10 bus lines are participating in the pilot initiative, including bus services assigned to Tourism and Sightseeing lines.
Similarly, Changjiang Daily reported that the city of Ningbo in Zhejiang province has also introduced the e-CNY payment method for its subway lines, allowing commuters to pay using the digital yuan at 125 stations in the eastern Chinese city.
The city introduced the payment method along with an incentive scheme that allows commuters using the payment method to pay only one cent. Ningbo became the ninth city to introduce the payment method in its subway system. Guangzhou is the first in the country to deploy the payment method for road transport.
China not alone in exploring CBDCs
The development comes at the back of the People’s Bank of China (PBoC) announcing that it would be exploring more use cases for the CBDC, as well as onboarding more cities to the pilot test back in June.
Since then, cities have found use cases for the digital yuan, including using its smart contract capabilities to negotiate loans and fee payments.
Earlier this month, the Rural Commerce Bank of Zhangjiagang, located in China’s Suzhou province, made out an e-CNY loan to an environmental protection equipment manufacturer collateralized with intellectual property (IP).
In the city of Chengdu, located in China’s Sichuan province, the Bank of China, launched a platform to allow parents to pay smart contract regulated fees for extra-curricular classes for their wards using the digital yuan platform.
While China is far ahead in adopting a CBDC, it is not the only country exploring the sovereign-backed digital currency. According to a Bank for International Settlements (BIS) report, over 100 central banks are at various stages of CBDC development.
The central bank is highly bullish on CBDCs, recently stating that it is the only viable tool for maintaining the global financial system.
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.
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