Several reports have emerged that the Agriultical Bank of China (ABC) has started testing China’s digital Yuan or RMB on ATMs. The ATM support will include support for withdrawals and deposits. Various tests carried out have included card-based wallets, wearable devices, as well as offline payments.
Also, outlets that offer support for the RMB have expanded from stores and restaurants to metro card payments and mobile phone top-up.
China has been at the forefront of developing a government-backed digital currency known as the Chinese digital Yuan. The effort has taken a new leap with this news of ATM enablement for the assets.
Users have started spending lottery funds
There have been reported transactions on those ATMs from customers at some of the branches. China recently allocated the digital yuan to some residents as part of its “red envelop” lottery. The country’s central bank distributed $3 million worth of digital yuan to $100,000 local citizens.
Some of the beneficiaries have started converting and spending the digital yuan they received.
Deposits and withdrawals on the digital yuan-enabled ATMS are done through a smartphone app. It enables users to convert cash from or to the central digital bank currency.
The Agricultural Bank of China is among the “Big-Four” state-owned banks in China, representing some of the biggest banking institutions in the world.
Zou Hua, head of the Digital Yuan Innovation Lab section of the bank, pointed out that the exercise is a testing phase. He said as the country is planning to launch the digital yuan, it’s important to roll out ATMs to test the feasibility of transactions. Hua added that the ATM launch is geared towards the realization of the eventual digitalization of cash.
There is an indication that the accelerated growth of the pilot program could lead to a large-scale rollout within the year.
Digital Yuan not replacing fiat currency
Some observers of the development have voiced fear that the official launch of the digital Yuan to make fiat currency go extinct.
But Hua has quelled that fear, saying that China has careful to follow a cautious approach after seeing how Facebook’s Libra was met with serious opposition.
China is no doubt at the helm of things when it comes to launching a government-backed digital currency. The plan is to make the digital yuan the right cashless payment method in the future.
China close to digital yuan launch
The report also revealed that AgBank wants to establish an office for the innovation on digital yuan in Shenzhen.
Apart from AgBank, some other major banks have their own projects to develop apps for the digital yuan’s initiative.
China is far ahead of many other nations when it comes to the launch of a digital currency offered by the government. Already, digital yuan has gone through various stages of testing. The ATM initiative is a major milestone and an important step towards the realization of digital yuan adoption
However, the Bahamas was the first nation to launch a central bank digital currency when it launched its “Sand Dollar” in October last year.