In the latest advancement in China’s rollout of its central bank digital currency, two government-backed commercial banks unveiled prototype automated teller machines for foreigners to try the digital yuan, officially called e-CNY but still colloquially known as DCEP.
The development is only the latest to come from the government-hosted Digital China Summit last week in the Fujian provincial city of Fuzhou. Earlier at the same summit, local media reported that internet giant JD.com had begun paying employees in five cities with digital yuan.
DCEP stands for “Digital Currency, Electronic Payment” — the original name for China’s digital currency project that has been six years in the making. A year ago, China began testing the DCEP project’s digital yuan in select cities.
A multi-currency DCEP machine
Like an ordinary ATM, the Bank of China’s prototype allows foreigners to exchange foreign currencies into digital yuan. The machine automatically produces a DCEP hardware wallet in the form of a bank card. The DCEP ATM supports 17 foreign currencies, according to reporting from Yicai, a financial news site based in Shanghai. The wallet is accepted at all kinds of venues including shopping malls, supermarkets, vending machines and for public transportation. China watchers say the digital yuan ATMs will likely be timed to be available for the 2022 winter Olympic games in Beijing.
Industrial and Commercial Bank of China (ICBC) is also testing a similar machine that they are calling an intelligent terminal. The DCEP intelligent terminal allows people to deposit cash into their digital yuan bank account and is also able to issue digital yuan chip wallets, according to 21 Jingji. It reported that ICBC also supports foreign currency exchange but did not provide details on this feature.
This was not ICBC’s first trial of its intelligent terminal, however. During Beijing’s large-scale DCEP testing in February, ICBC added digital yuan deposit and withdrawal functions in eight existing ATMs in Beijing’s famed shopping street, Wangfujing. By scanning a QR code displayed on the ATM monitor, people who have already downloaded the DCEP app on their smartphone could transfer the yuan in their ICBC bank account into digital yuan and use their phone to complete purchases.
Digital yuan to provide convenience to travelers
Even though China may be the world leader in digital payments, especially mobile payments, foreigners have not been able to share in the experience when traveling in the country.
Both Alipay, owned by Alibaba Group, and WeChat pay, owned by Tencent, require users to link their payment account to a local bank card and a local phone number. In addition, registering a Chinese phone number requires providing identification numbers, which may raise privacy concerns.
The DCEP digital yuan is different, however. Issued by the People’s Bank of China, DCEP works the same as fiat currency in China and does not require a bank account.
After more than seven rounds of large-scale testing in four major cities, the DCEP has been accepted by tens of thousands of convenience stores, shopping malls and supermarkets and the number is growing.