Bank of China Launches Plans to Bridge Education with Smart Contracts
- The Bank of China is the leading institution in launching and issuing a central bank digital currency (CBDC.)
- Other countries such as South Korea and Japan are increasingly exploring the option of launching their own CBDCs.
The state-owned Bank of China has announced a new program to bridge education with smart contracts. Thanks to a collaboration between educational and financial authorities, parents living in Chengdu, a city in China’s Sichuan province, can sign up their kids for after-school activities using the digital yuan central bank’s currency, also known as e-CNY. This is one of the region’s attempts to improve its digital participation.
According to a local report, parents would have to pay a deposit to a private learning institution for some classes under the test phase. Afterward, a smart contract ties each lesson according to the deposit. This ensures that the parents will instantly get a refund of the e-CNY used to pay for lessons if their kids miss a session. The smart contract enables this automated refund process.
According to the Bank of China, this program will mirror the possibility of using smart contracts to monitor payments. It said,
The program seeks to explore the benefits brought forth by e-CNY smart contracts. One potential use case is replacing the role of regulatory authorities to monitor payment transactions between parents and private education entities. Another is improving transactions’ liquidity via zero transaction fees embedded in the e-CNY design.
China’s digital Yuan has racked up attention as many countries plan to launch their own central bank digital currency (CBDC.) The adoption of the e-CNY has significantly increased in recent months. 1 out of every 5 Chinese is said to have downloaded the digital Yuan app. The app is reportedly available in 23 cities across China. Residents in cities such as Shanghai, Beijing, Shenzhen, etc., can pay for goods using the e-CNY.
The e-CNY is quite different from cryptocurrencies like Bitcoin since it is issued by the Central Bank, unlike Bitcoin, which is not backed by a single entity. Chinese authorities plan to launch a full adoption campaign to see more locals use the digital Yuan as the country pushes for a stronger digital payment system.
Some of the payment systems in China, such as Tencent, have already announced plans to support the digital Yuan, meaning a widespread adoption is on the way.
CBDCs have grown in popularity in recent years. Several nations are exploring ways to create a digital payment system. Countries like South Korea, Japan, the UK, Canada, and others are considering launching CBDCs. Although the United States does not currently plan to establish a CBDC, the Federal Reserve has stated that it is looking at potential future methods for digitizing the dollar.