Huawei Phones Come With Builtin Digital Yuan Feature Enabling Payments Without Downloading Apps How Far Has Chinas CBDC Development Progressed

What’s happening?
Huawei recently officially released its brand-new operating system, HarmonyOS NEXT, in Shenzhen. This is Huawei’s first system version that is completely independent of Android. One of the major highlights is the embedded digital yuan payment function.
Users can directly activate the digital yuan through the system without the need to download additional apps for payment, which brings a major breakthrough in the popularization of digital currency.
This integration of functions will make it easier for up to 1 billion smartphone users to access, acquire, and use digital currency.
The built-in payment function lowers the threshold, and Huawei users don’t need to download the digital yuan app for payment.
In recent years, China has been actively promoting the development of the “Digital Yuan”, positioning it as Central Bank Digital Currency (CBDC), led by the People’s Bank of China, to create a digitized legal currency system.
Huawei, in cooperation with the People’s Bank of China, has embedded the digital yuan service into HarmonyOS NEXT, making it the world’s first operating system to support central bank digital currency (CBDC).
This move not only improves the usability of the digital yuan on smartphones but also brings more convenient payment services to up to 1 billion potential users.
When users want to choose the digital yuan as the payment method at the merchant’s end, they can directly select the digital yuan cashier in their mobile phones and make online payments. In this process, there is no need to download any related apps of the digital yuan in advance, truly achieving a smooth experience of “ready to use once you get the phone”.
Moreover, if users have other devices equipped with the Harmony system, they can log in to use the digital yuan at the same time, making digital payments more convenient.
Digital Yuan payment is unlimited, China actively promotes pilot projects.
The launch of the digital yuan not only improves the convenience and security of payment but is also expected to replace some cash transactions, reduce illegal fund flows, and further consolidate the government’s regulatory role in the currency system.
The pilot programs of the digital yuan started as early as 2020 and have been tested in multiple cities. The pilot programs include various scenarios such as daily consumer payments, government subsidy distribution, public transportation, etc., to test the actual application effect of digital currency.
As the pilot cities continue to expand, the application scenarios are also becoming increasingly diverse. At the 2022 Beijing Winter Olympics venue, international tourists can experience digital yuan payments for the first time.
Apart from Huawei’s Harmony system, the digital yuan has also frequently appeared in various activities across China recently and is gradually infiltrating into daily life. According to official statistics, as of the end of June 2023, the transaction volume of the digital yuan reached 1.8 trillion yuan (about 249.3 billion U.S. dollars), and the number of electronic wallets opened reached 120 million, showing that the digital currency continues to expand in China.
The International Air Transport Association (IATA) also recently announced that it will accept digital currency payments before the end of the year, and the digital yuan will be among the first on the list.
While the combination of Huawei’s mobile phones and the digital yuan has certainly improved convenience, it has also raised some concerns, such as issues around user privacy and data security. After all, once the digital yuan is embedded in the system, how to ensure that this information is not abused becomes the primary concern of users.
Balancing innovation and risk control will be an important issue to face in the promotion of digital currency, and whether China’s digital yuan can solve these one by one still requires time to observe.
Reference materials:
cointelegraph