Chinese banks Bank of Communications (Bocom) and China Construction Bank (CCB) have begun exploring the possibility of using the digital currency of the People’s Bank of China (PBOC) in insurance and investment.
According to local media reports, leading state-owned banks have launched a pilot program in which they will explore options for using the state digital currency to buy insurance products and invest in investment funds. Bocom and CCB believe this will move the digital yuan beyond daily retail payments.
China Construction Bank said it has partnered with e-commerce giant JD.com and Shanghai Tiantian Fund Distribution platform, owned by financial data provider East Money. Through this partnership, holders of digital yuan will be able to invest in online funds.
“We have been conducting research and participating in the development of the digital currency of the Bank of China since 2017. We believe that the digital yuan will become an important part of our payment system and will improve the efficiency of payments in general, ”said Zhang Min, Executive Vice President of CCB.
CCB has already opened a total of 8.42 million digital yuan wallets, 7.23 million of which are for individuals and 1.19 million for businesses. As of June 2021, China Construction Bank has already processed about 28.5 million transactions totaling 18.9 billion yuan ($ 2.9 billion) using the NBK digital currency.
Qian Bin, Executive Vice President of Bank of Communications, added that the bank has also done a lot to ensure the stable operation of the digital yuan system. The bank is now focusing on exploring scenarios for the use of government stablecoin in the insurance industry.
“China’s central bank digital currency is a form of legal tender. Therefore, as a commercial bank, we are obliged to promote the development and increase the liquidity of the currency, ”Qian said.
In July, the NBK published the Digital RMB White Paper. According to the document, one of the main characteristics of China’s state cryptocurrency will be the ability to program it using smart contracts.
