Huawei is embedding Chinese CBDC, digital yuan, directly into its HarmonyOS NEXT operating system, potentially reaching up to a billion users.

Per Coinbase report, Chinese telecom company Huawei is incorporating the digital yuan – Chinese central bank digital currency (CBDC) – into its HarmonyOS NEXT operating system that was introduced on Oct. 22.

It is estimated that there are up to 1 billion Huawei smartphone owners who would be able to access the new services straight from the phone’s software.

This integration allows users to make digital yuan payments without a separate app, streamlining access to China’s central bank digital currency. Earlier efforts to boost the CBDC ecosystem in China included WeChat and Alipay adding support for payments using the digital yuan, as well as the official app’s ability to make payments from mobile phones offline in cases such as paying for metro rides.

HarmonyOS NEXT, the latest iteration of the Huawei proprietary OS, is the third-most popular operating system in the world, after Android and iOS. It operates independently from Android architecture and only hosts apps native to HarmonyOS.

Huawei launched HarmonyOS as an alternative to Android after Google’s services were restricted in 2019 due to U.S. sanctions. Initially used in devices like smart TVs and watches, HarmonyOS expanded to smartphones in 2021, with plans to integrate China’s digital yuan harboured ever since.

With the latest integration, users can access the national digital currency without needing a separate app on their smartphones. Moreover, Huawei reportedly aims to expand this service into IoT components for broader usage across various devices.

This integration also benefits the People’s Bank of China with enhanced monitoring and security capabilities.

In mid-2024, it was reported that although many state Chinese workers receive their salaries in “e-CNY” CBDC aka digital yuan, they seldom have chances to use it and often convert it all to physical cash.

However, it seems that the novel virtual currency is making slow, steady progress in its utility and expansion. It is increasingly used for public events held in Beijing. Besides, the digital yuan is the first CBDC to be accepted by the International Air Transport Association (IATA).