Government-backed Chinese banks have reportedly started exploring new use cases for the digital yuan by allowing citizens to use it to buy insurance products and investment funds online.
The South China Morning Post reported on Tuesday that leading Chinese banks such as Bank of Communications (Bocom) and China Construction Bank (CCB) are working with fund managers and insurers to enable e-yuan payments for sectors beyond the retail landscape.
The report states that CCB has collaborated with an investment funds platform, Shanghai Tiantian Fund Distribution, for allowing citizens to make online fund investments with the digital yuan. JD.com, a China-based e-commerce company, will also be a part of this collaboration. CCB executive vice president Zhang Min said:
“We have since 2017 been participating in the research and development of the central bank digital currency, which we view as significant for our payment system due to its ability to enhance payment efficiency.”
CCB has reportedly opened a total of 8.42 million e-yuan wallets dedicated to 7.23 million individual users and 1.19 million companies. Bocom executive vice president Qian Bin said that the bank is currently exploring numerous use cases for the e-yuan in fund management and the insurance space.
The efforts of the state-backed banks go beyond the original blueprint of the central bank digital currency set by China’s central bank, which was intended to power the low-value, daily retail payments landscape only.
Related: China to ‘maintain a high-pressure situation’ on crypto, official says
Despite China’s aggressive move to make the digital yuan mainstream, the government has been keen to rule out the use of Bitcoin (BTC) and other digital currencies within its jurisdiction.
Yin Youping, the deputy director of the Financial Consumer Rights Protection Bureau of the People’s Bank of China, recently stated that the government intends to maintain a “high-pressure situation” on crypto transactions.
Moreover, Chinese Bitcoin miners from Yingjiang County have also been delisted from the local hydropower grids as the crackdown continues.