The state-owned banking platforms in China intend to take part in the endeavors for the integration of the central bank digital currency (CBDC) of the country with the social security cards that are issued by the government.
In the previous month, the country’s Ministry of Human Resources and Social Security stated that it intended to delve into and support the methods to incorporate the payment functions of digital yuan into the cards.
Banks in China Take Part in Endeavors of Beijing to Integrate the Digital Yuan with Social Security Cards
In government offices and banks, plastic cards serve identification-related purposes. A few of them already possess smartcard functionality. Nonetheless, Beijing is now focused on issuing upgraded and exclusive 3rd-generation cards.
In an effort to expand digital economy growth, Beijing city recently issued a series of implementation opinions on better utilizing data, aiming to achieve a data market size of 200 billion yuan ($27.8 billion) by 2030 and cultivating a hub for data services.… pic.twitter.com/0BxgzueUpO— Global Times (@globaltimesnews) July 5, 2023
The respective cards will permit the residents, specifically those living in rural areas and elders, to carry out payments with digital yuan by using the respective cards.
The figures related to smartphone ownership are comparatively low among the rural as well as elder populations. Several people in the respective zones are additionally unbanked. According to the Economic Daily (a news outlet in China), several commercial banking institutions have started exploring the concept of incorporating the functionality of digital yuan into exclusive social security cards.
They take into account the Bank of China (the entity that is considered among the largest state-operated commercial banking entities). Banks like it were granted permission to offer social security cards back in 2018 with functions analogous to bank cards. However, at the moment, the Bank of China is operating on a 3rd-generation solution. The respective solution will take into account the issuance of the cards.
Li Xin, who operates as the Chief Business Manager of the Digital Currency Office of the bank, mentioned that the solution takes into account physical cards. In addition to this, the executive added, it also involves portable tags, bracelets, and so on. The banking organization additionally has a strategy to broaden the usage scenarios dealing with exclusive wallet cards for the inclusion of payments as well as micropayments.
The Cards Enable the Payment of Medical, Transport, and Other Such Bills
The cards, wearable wallets, or fobs will permit the residents to recompense their bills and settle public transport bills or medical expenses at the hospital. They will also facilitate the payouts of pensions along with other benefits. As per Li Xin, the digital yuan offers wide applicability, safety, stability, convenience, and efficiency.
It is naturally compatible with the latest requirements dealing with a social security system to cover the entire populace both in rural and urban areas. The executive added that the digital yuan’s deep integration is aligned with the present trends as well as the digital economy’s development. As per the reports, Beijing recently issued several implementation opinions concerning better usage of data.
This move is focused on gaining a data market volume of nearly 200B yuan (up to $27.8B) by 2030. The China International Capital Corporation recently organized a study in which the researchers pointed out that they anticipated the CBDC project to experience swift development in the upcoming 3 years.
China-based banking organizations have been making great efforts to create a CBDC wallet that would operate offline since the year 2020.
As brought to the front by the reports, a series of hard wearable wallets are to be distributed among the athletes as well as those who support the Asian Games of September. The respective games will take place in Hongzhou in Zhejiang Province.
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