China’s state-owned commercial bank set to pilot digital yuan “smart contract solution” allows parents of elementary school students to pay for their children’s education using e-CNY.
According to media outlet The Cover, the initiative is the brainchild of Bank of China, one of China’s “big four state-owned commercial banks”. The project is being implemented in Chengdu city, in Sichuan province, central China. The bank has partnered with Chengdu’s financial and education regulators and will allow parents to pay for their before and after school clubs, sports lessons and extracurricular lessons. your child using digital fiat.
Under the program, parents pay a fixed deposit in digital yuan. These funds are then put into a “smart contract” with private contractors who run clubs or provide lessons. This contract is only activated when the child joins a club or a school session.
For example, if a child misses a lesson due to illness, the contract will be void and the deposit will be returned to the parent’s CNY e-wallet.
Traditionally, local financial and education regulators have acted as intermediaries in such situations – monitoring school attendance and receiving funds from parents before transferring funds to private contractors.
But the Bank of China is quoted as saying that the use of digital yuan smart contracts will allow regulators to step out of the equation – and allow parents to pay parents directly. private contractor. The bank proposes that smart contract technology will also promote transparency in payments.
While smart contracts are traditionally used in the blockchain and crypto space, the People’s Central Bank of China (PBoC) argues that they can use smart contract technology in their own e-CNY project. The PBoC has previously applied for at least eight patents that have “smart contracts” in their title.
Chinese financial experts have stated that smart contract technology can be applied to the national payment system after the digital CNY is rolled out nationwide.
Meanwhile, Bank of China also explained that it will give away digital yuan tokens to people in Chongqing – provided they only use the currency to pay for low-carbon products and services, such as plastic-free food delivery and public transport.