Huawei's HarmonyOS NEXT brings digital yuan to 1 billion Users - The future of digital payments begins!

Huawei has now introduced the digital yuan, China’s central bank-issued digital currency (CBDC), into its HarmonyOS NEXT operating system. This move aims to enhance accessibility for approximately 1 billion smartphone users, making digital yuan transactions on Huawei devices simpler and more convenient.

HarmonyOS NEXT, also known as HarmonyOS 5.0, was officially launched on October 22, 2023. This latest innovation from Huawei is designed with various improvements to support wider digital yuan usage across all smart devices.

HarmonyOS NEXT becomes Huawei’s third operating system

HarmonyOS NEXT marks Huawei’s third operating system and the first to be fully developed by the company’s internal team.

As the world’s third-largest operating system after Android and iOS, HarmonyOS NEXT is optimized to support specialized applications designed for the HarmonyOS ecosystem, delivering a unique experience compared to previous operating systems.

The development of HarmonyOS began when Huawei faced restrictions from the U.S. government in 2019, prompting the company to create an independent solution outside the Google ecosystem.

Initially launched for smart TVs and wearable devices, the system expanded to the smartphone market in 2021, with plans to integrate the digital yuan already under consideration at that time.

This latest integration allows users to use the digital yuan without the need to download additional applications, making the CBDC more accessible. Updates in wallet management and integration capabilities with other financial applications are also expected to enhance user convenience.

Further development includes plans to embed the digital yuan into various chips and Internet of Things (IoT) devices, expanding its functionality across multiple platforms.

The People’s Bank of China will benefit from enhanced security and improved monitoring systems, enabling more effective oversight of digital currency transactions.

The digital yuan has seen significant, steady growth, recently featured at major events such as the 2024 China Science Fiction Conference and the Beijing Craft Beer Festival, where over 22.6 million citizens held digital yuan wallets.

In a major development in the international aviation sector, the International Air Transport Association (IATA) announced on October 29 that it would begin accepting digital currencies, with the digital yuan as the first currency adopted.

According to IATA Senior Vice President Muhammad Albakri, “China is one of the most advanced countries globally in digital currency adoption.” The digital yuan will become the 74th currency processed by IATA, with integration expected to be complete by the end of the year.

China prepares to revise AML law to address risks associated with virtual assets

Earlier this year, China announced plans to revise its outdated Anti-Money Laundering (AML) Law in an effort to tackle growing risks related to virtual assets.

This revision is seen as urgent, as China’s AML law has largely remained unchanged for over 17 years, leaving it ill-equipped to address developments in cryptocurrencies like Bitcoin.

Andrew Fei, a partner at the law firm King & Wood Mallesons in Hong Kong, stated that revising China’s AML law is essential for managing risks arising from virtual assets, in line with evolving international standards and best practices.

The Financial Action Task Force (FATF), an intergovernmental body focused on preventing money laundering and terrorist financing, has provided detailed recommendations for addressing virtual assets in the upcoming AML legislation.

While FATF rates China as “largely compliant” with AML recommendations for virtual assets, the country’s ban on crypto activities exempts it from some of the established criteria.