No 663 - e-CNY rollout

　　原创

　　BANDSFinancial

　　磐石金融有限公司（ BANDS Financial Limited ）在香港注册成立，是一家持有香港证监会（SFC）2号牌照的期货经纪公司，业务涉及中国以外全球大部分活跃期货及期权市场。

　　News from the 4th Digital China Summit held last weekend in Fuzhou for those of you who listen for the shifting of the tectonic plates below our feet carried the distinct rumbling of change ahead. The event was co-hosted by the Cyberspace Administration of China, the National Development and Reform Commission, the Ministry of Industry and Information Technology, the State-owned Assets Supervision and Administration Commission of the State Council. Reports confirm that “Not only did the PBoC host its own exhibition area to educate the public on the adoption of e-CNY, major state-owned commercial banks as well as technology giants like Alibaba's Ant Group, Tencent, JD.com, and Huawei all setup booths to showcase their e-CNY wallet services.” Indeed, under an uninspired headline in the Global Times, “Ant Group and Tencent work with China's central bank to push forward digital yuan.” The article outlines that Ant Group and Tencent are cooperating with the PBOC‘s Digital Currency Research Institute in the rollout of China’s e-CNY. Currently, Alipay and WeChat Pay control about 94% of the online payment market in China.Now, I might say China is the home of technology, but as I have pointed out before, due to China‘s significant reliance on mobile technology, I no longer use banknotes or credit cards, I use my China registered iPhone. However, without a Chinese phone number and a very limited appetite for banknotes, post-COVID inbound foreigners will feel completely isolated unable to order a taxi and very likely unable to pay for it. The adoption of e-CNY will further close this circle. So I was interested that at the recent summit the Bank of China demonstrated a machine that would issue a “hard wallet” to foreign nationals. The idea is that foreign nationals with valid passports can put foreign banknotes into the machine, which will issue a physical e-CNY cardloaded with CNY based on the FX deposit and exchange rate.These e-CNY cards are not mere tap-and-go cards that you find supporting the transportation systems in most international cities. For an indication of their potential functionality, we can look at a card recently issued by the Postal Savings Bank of China, while not well known for its use of technology it is issuing a plastic debit card with a small thumbprint size display set in the card that shows recent payment details and balance information. This card was first trialled by the Postal Bank in January 2021 in Shanghai’s Tongren Hospital, where staff used the card in their hospital canteen. Therefore e-CNY “hard wallets” have NFC chips that allow the sending and receipt of e-CNY without the use of the internet to phones and other enabled devices, and can show their current balances and transactions, all on a prepaid credit card size piece of plastic.Nobody knows when the state will initiate a full role out of e-CNY, but the media expects before the Beijing Winter Olympics in Feb 2022 might be achievable.Have a good day

　　Joh