After-school lessons in China will be paid by Digital CNY “Smart Contract”, according to recent reports.
A Chinese state-owned commercial bank is planning to test a “smart contract solution” powered by digital yuan that would allow elementary school parents to pay for their children’s education using the e-CNY.
After-School Lessons In China Will Be Paid By Digital CNY “Smart Contracts”
According to The Cover, the program is the idea of the Bank of China, one of the “big four” state-owned commercial Chinese banks. The initiative is being implemented in Chengdu, China’s central Sichuan Province. The bank has partnered with Chengdu’s education and finance authorities to allow parents to use digital fiat to pay for their children’s pre- and after-school clubs, sports courses, and extracurricular lessons.
Parents participate in the initiative by making a set deposit in digital yuan. This money is then placed in a “smart contract” with the private contractors that operate the clubs or provide the training. This contract becomes active only when the child participates in a club or class.
If the kid is unable to attend a session due to sickness, for example, the contract is terminated and the deposit is refunded to the parents’ e-CNY wallet.
Local education and finance agencies have always had to serve as mediators in such instances, checking attendance and collecting payments from parents before releasing funds to private contractors.
Regulatory Agencies Will Stand Back
However, the Bank of China was cited as saying that adopting digital yuan smart contracts will allow regulatory agencies to stand back and allow parents to pay private contractors directly. According to the bank, smart contract technology would also improve payment transparency.
Although smart contracts have been employed in the blockchain and crypto arena, the People’s Bank of China (PBoC) claims that smart contract technology can also be used in its own e-CNY initiative. Previously, the PBoC applied for at least eight patents using the phrase “smart contract” in their names.
Chinese financial experts predict that if the digital CNY is widely adopted, smart contract technology might be deployed in the national payments system.
Meanwhile, the Bank of China has stated that it will provide digital yuan tokens to Chongqing residents if they exclusively use the coins to pay for low-carbon emission items and services such as plastic-free food delivery and public transportation.
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