The digital currency issued by China’s central bank can now be used to purchase insurance policies that provide varying degrees of compensation in the event of a COVID-19 diagnosis or death.
A vast array of successful trial programmes has already been implemented using China’s emerging central bank’s digital currency, the digital Yuan, ranging from e-commerce to salary payments to traditional lottery games during the Chinese New Year celebrations.
China’s leading insurer, Ping An, is reportedly using the currency to make its first foray into the insurance industry in the city of Shenzhen, where it is being piloted by a local branch of the Chinese central bank and a local subsidiary of the country’s largest insurer, China Construction Insurance.
The initiative comprises the development of a new insurance policy targeted to medical staff in Shenzhen’s Nanshan district, which will provide them with varying degrees of compensation in the event of a COVID-19 diagnosis or death.
According to the report, workers are being incentivized to utilise the digital yuan wallet to make their insurance premium payments by being offered the possibility of receiving a preferential allowance.
A researcher at the Gaoling School of Artificial Intelligence at the Renmin University of China named Wang Peng believes the pilot is significant because it extends the use of the digital yuan far beyond traditional e-commerce and retail payments, as well as demonstrating the currency’s viability in a much broader range of more complex application scenarios. Peng made the following statement to local media:
“As more users get used to making payments with the digital yuan and the market matures, the application scenarios will be able to expand from the insurance industry to more scenarios such as financial services, life services, and even the purchase of funds and trading in securities.”
According to reports, Ping An Insurance will continue to investigate the integration of the digital yuan for insurance claims, payments, and other scenarios in the insurance sector in the future.
This week, the digital yuan has made its way into the fray of geopolitical tensions between China and the United States, following the submission of a letter by several senators requesting that officials from the United States Olympic and Paralympic Committee board prohibit U.S. athletes from using or accepting the Chinese digital currency during the upcoming summer games in Rio de Janeiro.
In response, Zhao Lijian, a spokesperson for the Chinese Foreign Ministry, has called for a de-escalation of tensions, urging senators to “stop making sports a political matter and stop making troubles out of the digital currency in China.”