In a significant development, the city of Shenzhen in China has introduced digital yuan smart contracts for pre-payments on car purchases, marking a collaboration with the Agricultural Bank of China.
As reported by the local newspaper Jing Bao, the initiative saw its first successful transactionsTransaction Exchange of value, property, or data between two parties. in early February, with consumers using digital yuan-powered smart contracts to buy new vehicles. The pilot pre-payment program was launched in partnership between the Pingshan District Administration for Market Regulation and the Bank.
Mr. Wang, one of the early adopters, completed his car purchase at the Haodi Automobile Dealership and Service Center. The entire transactionTransaction Exchange of value, property, or data between two parties. was conducted seamlessly on the digital yuan platform provided by the Bank’s Shenzhen branch.
This innovative system enables customers to pre-pay for their cars using digital yuan, automating both the contract and payment processes. Funds are released upon delivery of the vehicle, ensuring the security of buyers’ deposits and streamlining the overall purchase experience.
Wang highlighted the natural apprehension consumers may feel when committing a significant amount of money to a car purchase before receiving the order. However, making the deposit at a dealership that supports e-CNY pre-payment can alleviate such concerns.
Additionally, the Pingshan District, home to the Haodi Dealership, has introduced a “Pre-Pay Carefree Zone” to further facilitate such transactions.
Approximately 50% of vendors utilizing pre-payments and deposits have embraced the central bank digital currency (CBDC) business model, including restaurants, after-school programs, and educational institutions.
The Pingshan District Administration for Market Regulation affirmed its commitment to ongoing collaboration with financial institutions to leverage the advantages of digital yuan in facilitating smart contracts. Furthermore, it emphasized the importance of transitioning from “payment” to “smart payment” with e-CNY, expanding its application domain for pre-payments and creating a more secure and reassuring consumer environment.