China tests CBDC metro payments without power or network.

The Chinese city of Qingdao will test a digital yuan public transport payment system that does not require electricity or network connection, marking another national first for the central bank digital currency (CBDC).

This news comes after another city in the pilot zone announced that it would give away some $140,000 worth of CBDC discount tokens.

According to Securities Times Network (via Stockstar), Qingdao city officials said that the pilot project would begin at Zhangcun Station and Keyuanjing 7th Road, two stations on Qingdao’s Metro Line 4.

The Digital Currency Research Institute of the central People’s Bank of China (PBoC), the central bank’s Qingdao branch, and the Qingdao Municipal Transportation Bureau organized the project.

The Qingdao Metro Group is also a co-organizer of the project, and it will be jointly funded by the state-run Bank of China, China Telecom, China Unicom, and a company named Digital Finance Public Service.

The pilot program will allow digital yuan users to pay for transportation using their mobile devices, even if their phones are turned off or have no network coverage, through the use of near-field communication (NFC) technology. NFC hardware is a feature of most modern smartphones.

Earlier this year, the PBoC unveiled a function that enables users of its digital yuan app to use their phones as a “hard” wallet, also utilizing NFC technology. However, the solution had not yet been adapted for use on metro networks. That will change on June 20, when the stations begin piloting the solution.

To use powered-down devices in this manner, users will need to add their China Unicom or China Telecom SIM card details to their PBoC or Bank of China’s software-based digital yuan wallets. Wallet balances will be automatically debited when users touch their powered-down smartphones against card readers at the stations’ ticket gates.

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Meanwhile, the city of Ningbo, in Province, has announced that it will give away around $140,000 worth of coins in “lucky red” digital envelopes.

The city said it would distribute 20,000 envelopes, each containing up to $11 worth of tokens. However, the coins will only be redeemable in the form of discounts when recipients spend $14-28 worth of digital yuan with merchants based in the city.

YY News reported that the event runs from June 21 to June 24.

This move follows similar giveaways, including a handout of around $2.75 million worth of CBDC coins and coupons in Fuzhou late last year.