Recall that the Chinese state-owned commercial bank, People’s Bank of China (PBOC) launched the e-CNY otherwise known as the digital yuan to enable the convenience of cash flow, Financial inclusion, and Financial stability in the country.
Recently, the Bank is set to launch a digital yuan-powered “smart contract solution”, that allows elementary school parents to pay for their children’s education using the e-CNY in a bid to improve primary education.
The bank has already partnered with Chengdu’s education and financial authorities that will enable parents to pay for their children’s pre and after-school clubs, sports lessons, and extra-curricular lessons using the digital yuan. Under the program, parents will pay a fixed deposit using digital yuan.
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These funds are then put into a “smart contract” with the private contractors who run the clubs or offer the lessons. The contract is only activated when the child attends a club or lesson. If the child misses a session, maybe through illness, the contract is voided, and the deposit is returned to the parents’ e-CNY wallet.
Traditionally, local education and financial authority have had to act as intermediaries in such situations, monitoring attendance and taking payments from parents before passing funds on the private contract.
According to the Chinese state-owned bank (PBOC), it stated that using the digital yuan smart contracts would allow regulatory authorities to step away from the equation and allow parents to make payments directly to private contractors.
The bank is hopeful that the e-CNY smart contracts would be able to replace regulatory authorities between parents and private education entities. It also aims to improve transactions enabling liquidity via zero transaction fees embedded in the e-CNY design.
People’s Bank of China (PBOC), suggested that using smart technology would also enable the promotion of transparency in payments. Although smart contracts are traditionally used in the blockchain and crypto space, the Chinese bank argued that it can also make use of smart contracts in its e-CNY project.
No doubt the Chinese government’s inclusion of e-CNY in its educational industry, seeks to ensure that there is transparency in the payment of fees for children in Elementary School.
On the other hand, a few months ago in the country, there has been tremendous growth in the use of the digital currency. Consumers in China have performed 264 million transactions involving the e-CNY otherwise known as the digital yuan. An estimated 4.5 million merchants across China now accept the e-CNY as means of payment, as experts in the country note that the digital currency has helped to improve quality of life and also helped to stimulate consumption.
These experts also state that the e-CNY has demonstrated to be an invaluable tool in ensuring steady economic development through its functions such as smart contract utility.
The e-CNY also seeks to improve the convenience of capital flow, making China’s financial industry more accessible to the rest of the world, enhancing global competitiveness. The inclusion of the e-CNY smart contract for education, is said to be the latest move to drive the adoption of the currency.