The digital yuan, China’s central bank digital currency (CBDC), is being used as a security for car pre-purchase payment settlements.
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Local media reported that the Market Supervision Bureau in Pingshan, a district of Shenzhen with 400,000 citizens, and the Agricultural Bank of China have initiated a pilot test for car payments, incorporating the use of the digital yuan, China’s central bank digital currency (CBDC).
The pilot aims to leverage the benefits of the digital yuan by using smart contracts called smart locks. This lock can only be removed upon the in successful delivery of the car.
In early February, the initial group of consumers participating in the pilot deposited their funds through the “Intelligent Payment and Peace of Mind” system provided by the Agricultural Bank of China and are now awaiting the delivery of their cars.
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Once the delivery is completed, the system will automatically distribute the funds, streamlining the payment process and facilitating the orderly delivery of highly sought-after cars in the market.
Mr. Wang, a participant in the project, expressed that while consumers purchase cars from authorized dealers, delivering a significant amount of funds upfront is always a concern. However, with the digital yuan car prepayment system, the service is assured, and the funds are more secure.
Moreover, a broader prepayment initiative has been introduced in Pingshan, particularly in the Longping Tianhong Business District. In this area, 50% of the merchants offering prepaid services have partnered with banks to utilize the digital yuan for prepayments related to catering, education, training, and other services.
