Insight into China’s CBDC after Digital Yuan Wallet Briefly Went Live

Tim Alper
Last updated: | 2 min read

Experts have been looking into a soft-launched digital yuan wallet that went live briefly late last month – and said they have uncovered important technical details, and possible usage scenarios.

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The state-owned China Construction Bank (CCB), one of the biggest commercial banks in the world per market capitalization, has been working with the central People’s Bank of China (PBoC) on the latter’s digital currency pilots.

The CCB, along with three other government-run commercial banks, has been developing its own digital wallet service for the PBoC’s token.

The CCB’s wallets will allow the PBoC to distribute its token. They will also allow vendors to process digital yuan payments much as end-users currently do with e-pay platforms like Alipay.

But in late August, multiple web users in China were able to access a CCB soft-launched wallet that was apparently only intended for use in a controlled testbed environment. Some even tested out the wallet’s features and transferred funds to their wallets – until the CCB eventually pulled the plug, urging customers to be “patient.”

The CCB was even forced to close down wallets with funds in them – refunding customers through conventional bank transfers.

The CCB’s apparent gaffe has allowed Chinese experts to take a closer look at the wallet, however.

Per the People’s Daily, the CCB has since insisted that the wallet was simply a prototype and not evidence that the digital yuan’s launch was imminent.

Regardless, reporters noted that the wallet clearly had “payment, collection, scanning and transfer” functions. They said that it also made use of scannable QR codes and smartphone-based Near-Field Communication (NFC) technology.

The media outlet quoted a tech expert at a state-funded R&D center as stating that there was evidence that the wallet would also be usable offline – and needed neither phone network coverage nor WiFi/data connections to function.

“As long as the phone has enough battery power, the wallet will be functional,” the expert opined.

The media outlet said that there were in fact four tiers of digital yuan wallet available in the CCB offering. Each tier had a different ceiling for payments, as well as a maximum balance limit. The highest-limit wallet reportedly offered users a maximum balance of around USD 1,463, with a payment cap of around USD 531.
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