The digital yuan is becoming an increasingly predominant form of payment in China, with venue cities for the Asian Games incorporating a variety of central bank digital currency (CBDC) transport solutions. According to Shanghai Securities News, preparations for the event in Hangzhou, Zhejiang Province have reached advanced stages.
Updates to the Central People’s Bank of China (PBoC) digital yuan app now allow users to take advantage of a “ride code” function, enabling smartphone users to scan their devices on the Hangzhou Metro. The metro system then automatically processes transport fee payments from the user’s e-CNY wallets. This fast and efficient payment method could drastically change the way people utilize public transportation.
Similarly, five Asian Games events, including baseball and volleyball, scheduled to take place in the nearby city of Shaoxing will allow the Shaoxing Metro to accept digital yuan ride code payments. In addition, the ride code system will soon be introduced on the Hangzhou-Hai Intercity Railway, connecting major Zhejiang Province cities such as Haining with Hangzhou.
However, it’s essential to consider why China wants to showcase its digital yuan at the Asian Games. The PBoC initially intended to debut the CBDC at the 2022 Winter Olympics in Beijing; unfortunately, the COVID pandemic led to limitations on the event, allowing only athletes and coaches to attend. Nevertheless, participants were encouraged to use the digital yuan, receiving free, commemorative e-CNY hard wallets to spur adoption.
The upcoming Asian Games represent China’s first significant international sporting event since the pandemic began and the first since the CBDC pilot reached an advanced stage. Moreover, last year, all 125 metro stations in Ningbo, Zhejiang Province, announced they would accept digital yuan-powered fee payments at ticket barriers.
Furthermore, updates made this year to the PBoC’s official digital yuan app included features for making electricity-free digital yuan payments. With this development, pilot zone residents can use their smartphones to pay transport fees and make micropayments even when their devices are powered off or have no network coverage.
While the digital yuan’s rapid expansion and integration into China’s transport system indicate a progressive shift towards digital currencies, it is crucial to examine the impact of such widespread adoption. Will other countries follow suit with their own CBDCs to compete with China’s growing digital influence? With new payment methods on the horizon, it remains to be seen how these innovations will shape the future of global finance.