Unified QR Codes To Be Created For Digital Yuan Payments
- People’s Bank of China’s (PBoC) deputy governor and member of the Party Committee, Fan Yifei, said at the Digital Finance Forum that standardization is crucial for the construction of a sound ecosystem for the e-CNY.
- China is experimenting with the digital yuan on various levels and across several regions and aims to make the usage widespread soon.
Under its plans to massively expand the pilots for its digital currency, China, one of the early players when it comes to Central Bank Digital Currency (CBDC) development and issuance, is pushing for interconnectivity between the country’s digital yuan and other traditional digital electronic payment instruments. The central bank wants to achieve this using universal QR code payments.
People’s Bank of China’s (PBoC) deputy governor and member of the Party Committee, Fan Yifei, said at the Digital Finance Forum that standardization is crucial for the construction of a sound ecosystem for the e-CNY.
During the forum with a theme of “Gathering the Power of Innovation: Standardization and Opening-up,” Yifei called for the urgent need to promote the unification of digital identity, Bluetooth and near-field communications, and QR code mechanisms to enable users to scan a QR code for multiple kinds of payment access.
He further added:
“Moreover, to avoid user information leakage and eliminate data security risks, it is also necessary to coordinate and organize all parties to upgrade and strengthen related technologies, improve the level of security protection, and ensure the safety and convenience of payment.”
Yifei conveyed a positive attitude of the central bank by stating that it is ready to work “hand in hand” with all the entities, aiming to improve “long-term mechanisms for financial technology development, stimulate innovation, improve service quality and efficiency, and jointly build an open, healthy, and safe digital financial ecosystem.”
It is interesting to note that the statements by the deputy governor come at a time when China is witnessing massive adoption of QR code payment systems on payment service-providing platforms like WeChat Pay and Alipay, owned by Tencent and Ant Group, respectively.
The PBoC plans to implement more smart contracts for the digital yuan, according to Mu Changchun, director-general of the Institute for Digital Currencies, who made the announcement earlier this month. This is because more use cases have emerged during the digital yuan’s testing phase.
In October 2020, the PBoC began testing the e-CNY in Shenzhen, and since then, it has expanded the trials to at least 23 cities and provinces.
Additionally, Shenzhen, Guangzhou, and Xiong’an New Area made public declarations in May 2022 that they are distributing free digital yuan “red pockets” to encourage local adoption in the midst of the Chinese economy’s slow growth due to mass COVID lockdowns.