DC/EP: Huawei’s Newest Smartphones Come with Digital Yuan Wallet
Chinese technology giant has announced the latest release from its line, the much-anticipated Mate 40 series 5G smartphones, which come with a built-in wallet feature for digital yuan – the core of China’s digital currency electronic payment (DC/EP) project.
According to Yu Chengdong, CEO of Huawei’s consumer business group, Mate 40 series smartphones are suitable for the application of digital yuan because of their encrypted storage and high-performance near-field-communication capabilities which enable device-to-device transaction functions.
The company builds on the Mate 40 being the first to have “the flagship 5G SoC (system on chips)” with more than 15.3 billion transistors “making it the densest and most full-featured 5G SoC to date,” says Yu, according to China Daily at the global online press conference which marked the official release of the product range.
Though the People’s Bank of China (PBoC) has had pilot testings of the digital yuan of late including in Shenzhen’s Luohu district where 10 million yuan ($1.49 million) worth of the digital currency was sent to local residents for personal use (even when not officially issued by the central bank), it is not clear how users of Mate 40 smartphones will use their devices to interact with banks and physical digital yuan wallets. Yu only mentioned that the feature is a step to expand the currency’s usage on mobile phones.
No official date has been set for the release of the digital currency – though it was alleged that China Construction Bank had allowed users to sign up for a digital yuan wallet from within the bank’s own mobile app in August before the feature was withdrawn – speculations are rife that it could still take about two more years.
Huawei reportedly shipped about 240 million mobile phones in 2019 but sales have since been down following the series of restrictions placed on the company by the US government thus blocking its access to US technologies including semiconductor components and equipment. The boycott campaign, which is apart of an overall tech war between the US and China, has also been extended to other countries including in Europe thus hurting Huawei’s market share even more.
With Huawei having lost its license to use Android OS on its products causing its products to fail to perform outside of the Chinese market, the development and use of homegrown Kirin 5-nanometer chipsets in the Mate 40 series is expected to help boost sales on the homefront.
As the world’s first to support the digital yuan, the release of the smartphones which are said to rival Apple’s iPhone 12, has been met with mixed feelings from within the market with some praising its potential to boost digital currency adoption in general while others see it as a demonstration of the extent to which the Chinese government controls Huawei and can use the influence to gather information about users of the technology the company offers.
The DC/EP has been seen as the face of the Chinese government’s push to expand its economic dominance across the world. The country’s top tech company aligning with this agenda has the propensity to hasten the achievement of the digital currency’s objective in spite of the controversy such progression may generate at the global level. One of the world’s top figures in the fintech space, Jack Ma, this week hinted on the likely future role of digital currencies on a global scale.