Bank of China tests offline payments for digital yuan via SIM cards

The bank plans to allow users to make payments over the phone by integrating its digital yuan app with specialized "super SIM cards" equipped with near-field communication capabilities.

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The Bank of China, one of China's largest state-owned banks, is currently testing a new offline payment system that connects to SIM cards. This payment method is designed specifically for digital yuan, the digital currency of China's central bank (CBDC).

The July 10 announcement revealed the bank's partnership with telecom operators China Telecom and China Unicom, and plans to begin testing the next day.

The bank plans to allow users to make payments over the phone by integrating its digital yuan app with specialized “super SIM cards” with near-field communication capabilities. Users only need to bring their mobile phones near the point-of-sale terminals for payment, eliminating the need to turn on the phone.

Capture screenshot of Bank of China social media announcement. Source: WeChat

This integration allows transactions to be processed even when the phone is turned off. However, the bank said that these SIM card payment functions will only be accessible on specific Android phones in a few test regions of China. In January 2022, the People's Bank of China, the country's central bank, launched a trial version of the digital yuan app.

This follows China's recent move to expand use cases for its CBDC through its Belt and Road Initiative and cross-border exchanges, with plans to expand use digital yuan to pay taxes and utilities in the country.

In the Chinese city of Guanzhou, it is now possible to