Chinese Banks Preps to Launch Yuan-To-Fiat Conversion Tools
- Chinese banks are exploring new ways for yuan users to earn interest on their central bank digital currency holdings.
- The contents of digital yuan wallets are not able to generate interest when they are not in use.
- Now, users can automatically convert funds from digital yuan wallets to fiat, which can then be moved into deposit accounts.
Chinese banks are exploring new ways for yuan users to earn interest on their central bank digital currency holdings through “smart management” tools that can detect when funds have been left idle for long periods of time.
The central People’s Bank of China (PBoC) has stated that the main purpose for the digital CNY is to function as a retail payment tool. This means that the contents of digital yuan wallets are not able to generate interest when they are not in use.
Some commercial banks, however, acknowledge the fact that people might not have the time to convert their digital yuan holdings into fiat so they can earn interest, which lead to the development of solutions that automatically convert funds from digital yuan wallets to fiat, which can then be moved into deposit accounts.
One of the banks that offers these services includes the giant Industrial and Commercial Bank of China (ICBC). The bank is offering solutions that allows customers to customize settings on their wallets that uses algorithms that add digital yuan holdings above a certain amount to fiat savings accounts.
China Construction Bank has developed a similar solution that allows users to perform real-time-top-ups from their fiat accounts in the event that they attempt a payment from their linked digital CNY wallets.
CCB has titled this function Automatic Combination Payment and stated that it will allow customers to choose fiat accounts they want to link to their wallets.
The maximum amount of fiat that can be combined in a single transaction is USD 743. The daily limit is currently set at USD 1,488 for combination payments.
Read more: https://coinquora.com/chinese-banks-preps-to-launch-yuan-to-fiat-conversion-tools/
Text source: News – CoinQuora – Latest Cryptocurrency and Block
