Digital Yuan Arrives Shanghai in Card Form
The trial of China’s digital currency electronic payment (DCEP) project continues in yet another major city, Shanghai, and is being experimented in a physical card form instead of smartphones for digital payments.
Medical staff at the Tongren Hospital Shanghai Jiaotong University School of Medicine, where the trial is reported being undertaken, have been using the card in their canteen, according to a video posted by state media, Xinhua.
It shows the blue card with its small display to display all payment and balance information after every e-CNY transaction.
The legal digital currency of China （DCEP）conducted its first pilot in Shanghai, in the dining hall of Tongren Hospital of Shanghai Jiaotong University. The first user is Yu Yiming, the doctor who discovered the first patient with covid-19 in Shanghai. pic.twitter.com/FTCbm1lzjX
— Wu Blockchain (@WuBlockchain) January 5, 2021
“In the past, we paid more attention to the application of smartphones,” says the hospital’s director, Ma Jun, in the video. “However, in daily life and work, there are indeed many elderly people who are not used to smartphones. I think the introduction of a physical card for digital currency payment is very useful especially for the elderly. It can be seen and touched, and is very convenient. It can be used in everyday scenarios to pay without phones. So we welcome it.”
The hospital plans to accept the card for diagnosis, treatment and parking fee payment.
e-CNY linked to OCC’s new guidance
As China strives to be one of the first major economies to go cashless with the continual trial of the DCEP, Xinhua highlights some of the benefits of the digital yuan which seems to be gaining popularity as the use of cash declines. They include that it improves payment and settlement efficiency, reduces currency issuance costs and creates space for the implementation of unconventional monetary policies.
The card’s trial follows the release of a new guidance from the US Office of the Comptroller of the Currency (OCC) which reportedly goes far beyond crypto. The regulator, in its Interpretive Letter 1174, gives approval for US banks to use blockchains and dollar stablecoins as a settlement infrastructure.
National banks and federal savings associations (or banks) may use new technologies, including independent node verification networks and related stablecoins, to perform bank-permissible functions, such as payment activities, the OCC says.
While Tanvi Ratna, the founder of Policy 4.0 and a CBDC policy specialist, notes that the guidance may open the gates to a host of Wall Street stablecoins, Libra/Diem getting the retail usage approval and a possible move to a digital dollar, she adds that the move could also “be driven by geopolitics and the threat being perceived from the DCEP and China.”