This week, Bank of China, China Telecom, and China Unicom announced the joint launch of a “super SIM card” able to connect users’ mobile phones with their digital yuan wallets. The SIM card hardware wallet will initially be tested with the central bank digital currency (CBDC) in a limited number of pilot areas and is only be available to selected Android phone users, but it could soon be extended more widely.
SIM card wallet’s main characteristics
The premise is simple. Users only need to install a new SIM card issued by their mobile operators, log in to the digital renminbi app, and link it to their SIM card wallet to use the NFC function to complete e-CNY payments.
In fact there’s a dual NFC function because both the SIM and the phone support NFC. That means that even if the phone is switched off, a user can tap at a point of sale to make a payment using the SIM’s NFC function, as reported by Shenzhen Securities Times. However, some might worry about inadvertent payments. Hence the digital yuan app lets users set a maximum payment amount without a password.
By storing the digital cash on the SIM it makes it harder for hackers to steal because it’s not in the phone’s memory or storage.
China’s other super SIM cards
State-owned China Telecom has also recently developed a web3 SIM card with blockchain firm Conflux to reduce vulnerability to malware. It stores up to 10-20 times more data and exponentially increases the computing power of conventional SIM cards.
China Telecom is already planning pilots for metaverse digital assets, digital identity and Internet of Things (IoT) applications in Hunan and Hong Kong, but it is likely that many more similar trials will follow.
