In an advanced announcement issued by the Chinese local news site Shunwang-Jinan Daily, regulators in Jinan approved crypto payments in the transport sector. The regulatory action adopted by Jinan demonstrates the efforts made to push the adoption of central bank digital currency (CBDC) in China.
The July 2 report confirmed that bus routes in Shandong Province would allow passengers to pay using the digital yuan. A few days ago, the Jinan regulators conducted a pilot test to examine whether the CBDC payment can be used in the growing transport network.
Jinan City Introduces New Payment Method in Transport Industry
It was reported that the regulators experimented digital yuan payment on two bus lines during the pilot trials. Following a successful pilot trial, the regulators agreed to introduce CBDC payment to Jinan’s bus sector.
Referring to Shunwang-Jinan post, the pilot phase compelled Jinan city to invest in upgrading the existing card readers to support the new payment method. Additionally, Jinan regulators ensured that bus route software accepts customers to pay through the CBDC.
Besides the latest upgrades in Jinan’s transport sector, the regulators adopted a rewarding method to support the implementation of the digital yuan. Per the report, Jinan residents will receive at least six monthly discounted rides.
Chinese Authority Conducts Extensive CBDC Trials
The reward system aligns with the Chinese efforts in pushing for the adoption of the digital yuan.In April Changshu revealed plans to pay civil servants salaries using the CBDC. The Changushu announcement confirmed that from May 2023, employees in the public sector, including staff in government institutions and state-owned agencies, will receive their salaries in CBDC.
Before this, the Chinese authority planned to launch CBDC on its global infrastructure development strategy, known as the Road and Belt initiative. In an interview with a local newsroom, the Chinese authority revealed plans to introduce CBDC in cross-border trade.
In a statement issued in the city of Xuzhou, which acts as a fast-growing trade hub for China, the authority announced that the digital yuan would be utilized in tax remittance and other payments in utility services.
Importance of Digital Yuan
In a blog post published by the South China Morning, the Bank of China (BOC) entered into a strategic partnership agreement with BNP Paribas, a best-performing bank in France. This partnership aimed at supporting the digital yuan use case. This will be achieved by upgrading the BOC system to enable the BNP Paribas clients to conduct digital yuan transactions efficiently.
Even though the digital yuan has not been officially launched, China has tested the CBDC across multiple industries and business sectors. In a recent update, the Hong Kong Monetary Authority (HKMA) announced it would work with the Peoples Bank of China to conduct CBDC trials at the cross border. Darryl Chan, the deputy chief of HKMA, stated that Guangdong-Hong Kong-Macao commonly known as Greater Bay Area would be the first station the two partners will conduct the pilot phase for digital yuan.
he executive explained that the cross-border CBDC trials aim at improving efficiency and cutting unnecessary costs for the digital yuan. Chan noted that the cross-border CBDC pilot phase would involve other countries, including the United Arab Emirates (UAE) and Thailand.
Besides the digital yuan testing, the China government joined other jurisdictions to move away from the US dollar currency due to the ongoing devaluation crisis. A few months ago, China struck multiple business deals with Russia and India to pursue ways to replace the dollar currency.