China tracks Expenditure Pattern of Students With CBDC
China is well advanced and very close to creating the CBDC which the whole world has been awaiting. Reports showed that China has executed multiple tests to examine the functionality of the digital cash. They also aim to test the viability and feasibility of users as well as their expenditure pattern.
The recent trial was at a middle school in China where the pupils used digital RMB smart student ID cards. Another trial was done at the just concluded Winter Olympics where digital yuan was tested. It is worth noting that people used it widely. Subsequent trials were carried out at other locations in the country.
The Smart Student ID Card Model
The smart student ID card is designed in the form of a mobile SIM card in a feature phone with several use cases. With NFC features, the phone can execute payment and also recognize student identity. Also, a user’s location is traceable with the aid of the integrated GPS. Both ICBC and China Mobile worked jointly to create the smart student ID card.
Students can utilize the card to pay for goods and services within the school premises. They can also use it at off-campus vendors that are approved by the school authority. More so, parents will get notification on every transaction made with the card. They can also deposit more digital currency into the card when the balance is low.
Parents can closely monitor their ward’s expenditure pattern through the smart card. However, it allows third parties to intrude on the lives of people at a very tender age. Therefore violating an individual’s right to privacy.
The Utility Cases Of The Digital Yuan
The digital yuan was created to be used at senior care centers. This was the initial and primary utility case of the central bank digital currency.
However, new utility cases have been tagged with the digital yuan. The latest use case of yuan is to pay for goods in Free Trade Port areas at Hainan. Clients would prepay marchants with digital yuan, collect goods, then smart contracts would release payment to merchants. However, if the merchant refuses to close the deal after clients have prepared, clients would be refunded. This shows that the mode of payment is automated.
A local news source once reported that Dalian Commodity Exchange is the first to implement the use of yuan. The firm successfully used the digital yuan to settle fees in China’ future markets.