China’s rapid shift to mobile payments has made it difficult for people to get around without one of China’s major mobile wallets, which typically require real-name verification and a local bank account. Limited prepaid options only became available to foreigners in the last few years.
The e-CNY card now gives visitors an option for digital payments without downloading a separate app in the two cities where the machines are currently available.
The BOC first launched a similar foreign exchange machine in February at Yiwu International Trade City, a sprawling wholesale market in Yiwu, eastern Zhejiang province.
Both Zhejiang and Hainan, known for its tropical weather and sometimes called China’s Hawaii, have sought to become the window to the country for foreign tourists and merchants.
A visitor displays a cup of coffee purchased with China’s digital yuan, or e-CNY, at an exhibition of the 6th Digital China Summit in Fuzhou, southeastern Fujian Province, on April 26, 2023. Photo: Xinhua
In 2018, Hainan adopted a visa-free policy for passport holders of 59 countries, a policy that was suspended during the Covid-19 pandemic. Zhejiang, known for its tech hub capital city Hangzhou, made the largest contribution to China’s export growth last year at 18.5 per cent.
The machine installations align with Beijing’s mission to develop and promote its sovereign digital currency. The project, officially known as the Digital Currency Electronic Payment, started trials in 2019 as China sought to give unbanked people greater access to digital finance, according to a 2021 report by the nation’s central bank.
More recently, China has undertaken efforts to internationalise the digital yuan. Advancing the e-CNY’s use at home and abroad, such as by facilitating yuan-denominated bilateral trade and investment, plays into the government’s goal of bypassing the existing global financial system that has been used to enforce sanctions against Russia in the wake of its invasion of Ukraine. Beijing also hopes to boost use of the yuan in trade settlement, which could come at the US dollar’s expense.
Last month, the southern Guangxi Zhuang autonomous region, which borders Vietnam, said it would use e-CNY at the annual China-Asean Expo in September, as well as in business dealings within the region’s free-trade zones and for trade settlement.
Beijing has also been advancing the cross-border use of the e-CNY in Hong Kong, the key centre for offshore yuan. Last December, the BOC’s Hong Kong branch granted cash incentives to registered customers who used the digital yuan.
Meanwhile, the mainland completed a 40-day trial last year involving Hong Kong, Thailand and the United Arab Emirates that saw more than 150 million yuan (US$22 million) of e-CNY transferred across borders in 160 payments involving 20 commercial banks.
