Postal Savings Bank of China Uses Digital Renminbi to Develop Smart Contracts for E-commerce

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One of China’s big state-owned banks is using the digital renminbi as the basis of new smart contracts that specifically target the country’s huge e-commerce sector.

Postal Savings Bank of China (PSBC) recently launched the first digital renminbi prepaid product for the e-commerce and fitness sectors that works in combination with smart contracts.

According to PSBC, the development marks a breakthrough in the application of the digital renminbi to the field of smart contracts and further expands the application scenarios for the digital renminbi.

PSBC developed the smart contract product in cooperation with partners including Youlejinfu (Jiangsu) Technology Co., Ltd. (邮乐金服(江苏)科技有限公司) and Shujin Public Service (Qingdao) Co., Ltd. (数金公共服务(青岛)有限公司). Consumers can purchase, use, and manage corresponding prepaid services via the “YouShengHuo” (邮生活) App as well as PSBC’s official WeChat account and an accompanying WeChat mini-program.

The service is the first prepaid consumption service in the e-commerce and fitness industries to be launched in the “Yuan Manager” module of digital renminbi apps to obtain approval from the Digital Currency Research Institute of the People’s Bank of China (PBOC), which is China’s central bank.

After purchasing the digital RMB prepaid consumption service, consumers can view and manage corresponding service in the “Yuan Manager” module of the digital RMB App.

PSBC said the smart contract product fully guarantees the security of funds. The funds for purchasing prepaid consumer services are managed by PSBC and are transferred to vendors following actual usage. Consumers can also initiate a refund request for any remaining prepaid funds at any time, fully guaranteeing the security of prepaid funds.

According to PSBC, the new product also reduces costs and increases efficiency for vendors.

“By means of this product, platforms and merchants can expand the application scenarios of digital renminbi operations and enrich customer acquisition channels,” PSBC said in a statement.

“At the same time, given the features of instant transmission and zero transaction fees for the digital renminbi, they can enjoy high-quality and low-cost financial services.”

PSBC said the next step will be to “seize new opportunities in the digital renminbi prepaid market and fully leverage the advantages of smart contracts such as transparency, trustworthiness, automatic execution, and compulsory performance.”

“We will continue to promote innovations in digital renminbi smart contract operation and accelerate the expansion of digital renminbi prepaid application scenarios, with the goal of better protecting consumer fund safety, providing high-quality financial services to prepaid enterprises, and fully supporting the development of the real economy.”