{"id":32011,"date":"2023-07-06T03:11:52","date_gmt":"2023-07-06T07:11:52","guid":{"rendered":"https:\/\/ifintechworld.com\/markets\/crypto\/chinese-banks-join-cbdc-social-security-card-drive\/"},"modified":"2023-07-06T03:11:53","modified_gmt":"2023-07-06T07:11:53","slug":"chinese-banks-join-cbdc-social-security-card-drive","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=32011","title":{"rendered":"Chinese Banks Join CBDC-Social Security Card Drive"},"content":{"rendered":"
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Chinese state-owned banks are set to join efforts to integrate the nation\u2019s central bank digital currency (CBDC), the digital yuan, with government-issued social security cards.<\/p>\n

Late last month, the Chinese Ministry of Human Resources and Social Security said it wanted to \u201cexplore and promote\u201d ways to \u201cadd digital yuan payment functions\u201d to the cards.<\/p>\n

The plastic cards are used as a form of identification in banks and government offices.<\/p>\n

Some already have smartcard functionality.<\/p>\n

But Beijing is keen to issue new, upgraded \u201cthird-generation\u201d cards that will let citizens, particularly the elderly and those living in rural areas, make digital yuan payments with their cards.<\/p>\n

Smartphone ownership figures are relatively low among older and rural populations.<\/p>\n

Many individuals in these demographics are also unbanked.<\/p>\n

Per the Economic Daily (via Xinhua), a number of \u201ccommercial banks\u201d have \u201cbegun to explore\u201d the notion of adding digital yuan functionality to new social security cards.<\/p>\n

These include the Bank of China, one of the country\u2019s biggest state-run commercial banks.<\/p>\n

Banks, such as the Bank of China, were given permission to issue social security cards with bank card-like functions back in 2018.<\/p>\n

But the Bank of China is now working on a \u201cthird-generation\u201d solution that will involve issuing cards that can double as digital yuan wallets.<\/p>\n

Li Xin, the Chief Business Manager of the bank\u2019s Digital Currency Office, said that the solution involves not only \u201cphysical cards,\u201d but also \u201cbracelets, portable tags, and more.\u201d<\/p>\n

The bank also plans to expand the usage scenarios of the new \u201cwallet cards\u201d to payments and micropayments.<\/p>\n

The cards, fobs, or wearable \u201cwallets\u201d will allow citizens to pay their bills, pay on public transport, settle medical bills at hospitals, and even receive pension payouts and other benefits.<\/p>\n

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Chinese Banks Seek to Merge Offline CBDC Wallets and Social Security Cards<\/h2>\n

Li Xin said:<\/p>\n

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\u201cThe digital yuan is highly efficient, convenient, stable, safe, and widely applicable. It naturally fits with the new requirements of a social security system that covers the whole populace, in both urban and rural areas.\u201d<\/p>\n<\/blockquote>\n

The Chief Business Manager claimed:<\/p>\n

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\u201cThe deep integration of the digital yuan in the social security [system] is in line with current trends and the development of the digital economy.\u201d<\/p>\n<\/blockquote>\n

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In a study conducted by the China International Capital Corporation, researchers said they expected the CBDC to undergo \u201crapid development in the next three years.\u201d<\/p>\n

Chinese banks have been exploring \u201chard\u201d offline CBDC wallets since late 2020.<\/p>\n

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A range of wearable hard wallets will be distributed to athletes and supporters of September\u2019s Asian Games,<\/u> which will be held in Hangzhou, Zhejiang Province.<\/p>\n<\/p><\/div>\n