Chinese Banks Bolster Digital Yuan Resources Prior to CBDC Debut

By Tim Alper

Major Chinese banks are beefing up their digital yuan capacities ahead of the imminent launch of the nations central bank digital currency (CBDC).

Per the Securities Daily (via East Money), a number of the commercial banks that have already begun working with the central Peoples Bank of China (PBoC) on pilots for the digital CNY are building up infrastructure that will help them offer a range of services to the public once the CBDC rolls out.

As previously reported, the token will almost certainly roll out in the capital in time for the Winter Olympic Games, to be held in February 2022, although the PBoC has refused to issue a timeline for a nationwide release.

But the Postal Savings Bank, which is trialling an offline “hard wallet” for non-smartphone-using digital yuan holders, has “created a new department” dedicated to the CBDC.

The same media outlet noted that the Postal Savings Bank, as well as the China Construction Bank, the Industrial and Commercial Bank of China, the Postal Savings Bank of China and the Bank of Communications had made “repeated mentions” of the digital yuan in their most recent “semi-annual reports and performance briefings.”

And even though the token is still in a pilot stage, millions of Chinese people and companies already have active digital CNY wallets.

By mid-summer, the China Construction Bank had issued 7.23m personal wallets, 1.19m public wallets (for businesses and public organs), and had seen more than 28.45m transactions, worth millions of USD, carried out on its platform.

The Bank of Communications, meanwhile, has opened 1.16m personal digital wallets.

In addition to the Postal Savings Bank of Chinas new “major-level” CBDC department, the Industrial and Commercial Bank of China has “signed cooperation agreements with 46 [smaller] commercial banks” to “jointly create a digital CNY ecosystem” ahead of the rollout.

The Agricultural Bank of China, a member of the “big four” group of (state-owned) commercial banks, has signed a digital yuan partnership deal with the Bank of Xian.

The banks are also exploring a range of blockchain-related tech advances.

The China Construction Bank has stated that it will “increase the application of smart contracts, hardware wallets and offline payments,” while the Bank of Communications has also said it will use smart contracts as part of its future business offerings.