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This year, the authorities have significantly expanded the use of the CBDC, and its adoption has been growing despite concerns that China might use it to violate the privacy rights of its citizens.
China has moved on to the next phase of testing its central bank digital currency (CBDC), or e-CNY, and launched e-CNY payment on public transport. The option is already available in the cities of Guanzhou, Ningbo, Chengdu, Beijing, and more.
To pay for a bus or subway ride with e-CNY, passengers have to download the e-CNY app, deposit funds and scan the QR code located in the bus or subway payment section.
The first city to offer e-CNY payments for public transportation was Chengdu, the capital of Sichuan Province. It became the first Chinese city to accept digital yuan payments across its entire public transportation system, including all buses and subway lines. Next, authorities in Beijing and Suzhou made the same announcements.
Zhaosheng Jiang, director of Beijing-based Blockchain Research Center for 01 Finance, said:
“The transportation system adaptation is a key step in the pilot operation phase of the digital RMB. It further expands the scope of the use of the digital RMB.”
In Beijing, all 24 subway lines and four suburban railway lines started to accept e-CNY payment. In Guanzhou, passengers can use this payment method on 10 transit routes. In Ningbo, passengers are now able to pay for subway rides at 125 stations.
China’s Progress in e-CNY Adoption
Accepting e-CNY as a payment method in public transport comes as a part of testing e-CNY in China. This year, the authorities have significantly expanded the use of the CBDC, and its adoption has been growing despite concerns that China might use it to violate the privacy rights of its citizens.
The People’s Bank of China believes that e-CNY is a potential tool to advance regional economies. On that basis, the authorities started implementing the digital yuan as a payment method. For example, Shenzhen became one of the first few cities in China where residents pay municipal taxes and charges with the e-CNY. Besides, to boost the use of e-CNY and bolster consumer consumption, the city started distributing 30 million digital yuan.
In addition, the government has decided to use e-CNY smart contracts to improve primary education. As we have reported at Coinspeaker earlier, the People’s Bank of China is preparing a pilot test of the project to explore the potential benefits of the e-CNY smart contracts in education. Within the initiative, parents will pay lesson fees into the coffers of private educational institutions. Further, each lesson will be on a pro-rata basis. As a result of the smart contract, parents will be eligible for a refund when their children miss a lesson.