, ,

Two Major State-Owned Chinese Banks In Need of Fresh Applications for National Digital Currency

Two of the major state-owned financial institutions in China are in desperate need of new and advanced applications for the Digital Yuan because they want to pilot test the national digital currency. The applications are required to allow the owners and possessors of Digital Yuan for accessing Bank-supported financial products, such as insurance and investment funds, against Digital Yuan.

Currently, the financial institutions in China as well as fintech companies are in the process of determining the uses of Digital Yuan. Digital Yuan is a central bank-owned cryptocurrency (CBDC) meaning thereby that it is an official national cryptocurrency of China. Digital Yuan was launched in China within this year. While issuing Digital Yuan, China has had to take huge risks. It wanted to make sure that it should be an instant hit and no other crypto product is able to create a hurdle in its path. Prior to the launching, China launched a countrywide operation against cryptocurrencies, exchanges, and crypto miners. Whether they were foreign or even local, none was saved against the massive operation. Resultantly, the entire crypto industry has had to resettle outside China.

Now that the majority of hurdles have been removed, China is trying to ascertain the multiple uses of its national cryptocurrency. The Government’s objective is also endorsed and backed by the Chinese financial sector, irrespective of the banks being private of government owned.

According to news from China, two of the Chinese major state-owned banks are also trying to determine good uses of the Digital Yuan. They are exploring the possibility if they could be able to introduce financial products against Digital Yuan. The names of the banks are Bank of Communication and China Construction Bank. Both of these banks are interested in providing an opportunity of investment in insurance and investment funds on the basis of Digital Yuan. For this purpose, the banks are interested in obtaining proposals from applications developers to develop applications that could achieve the banks’ objectives.

The news item further reveals that both banks have developed business relationships with several insurance companies and Chinese fund managers. The fund managers and insurance companies will work towards incorporating a system through which Digital Yuan holders can invest in these two financial products. Banks opined that the two financial products are designed in a manner that can easily facilitate pilot testing of Digital Yuan.

It was also informed that China Construction Bank has partnered with a local fund investment company namely Shanghai Tiantian Fund Distribution. The EVP of China Construction Bank said that his bank was part of the Chinese CBDC project since its commencement in 2017. However, at that time, the bank rendered development and research services for the CBDC project. But now the bank wants to test the CBDC which was self-developed and composed by China Construction Bank.