**Huawei Integrates Digital Yuan into HarmonyOS NEXT, Reaching Up to 1 Billion Users**
Huawei is set to incorporate China’s digital yuan, a central bank digital currency (CBDC), into its HarmonyOS NEXT operating system. This integration aims to enhance accessibility for approximately 1 billion smartphone users, simplifying the process of using the digital yuan on Huawei devices. HarmonyOS NEXT, also known as HarmonyOS 5.0, was officially launched on October 22, 2023.
**HarmonyOS NEXT: Huawei’s Third Operating System**
HarmonyOS NEXT represents Huawei’s third operating system and the first one developed entirely in-house. It stands as the third most widely used operating system in the world, trailing only behind Android and iOS. This system is specifically designed to support applications created for HarmonyOS, setting it apart from its earlier versions. The development of HarmonyOS was a direct response to the restrictions imposed on Huawei by the U.S. government in 2019, which urged the company to innovate outside of Google’s ecosystem.
Initially introduced for smart TVs and wearables, HarmonyOS began to enter the smartphone market in 2021, with plans to incorporate the digital yuan already in the pipeline. With this new integration, users will no longer need to download a separate app for the digital yuan, making the CBDC more accessible. Enhancements in wallet management and interoperability with other financial applications are also expected. Additionally, efforts are underway to integrate the digital yuan into various chips and Internet of Things (IoT) devices, expanding its usability across multiple platforms.
The People’s Bank of China will benefit from enhanced security and monitoring capabilities through this integration, strengthening its ability to supervise digital currency transactions. The digital yuan has been gradually gaining traction, recently showcased at events like the 2024 China Science Fiction Conference and the Craft Beer Festival in Beijing, where local residents hold around 22.6 million digital yuan wallets.
In a significant development for the global aviation industry, the International Air Transport Association (IATA) announced on October 29 that it would begin accepting digital currencies, with the digital yuan being the first to be included. According to Muhammad Albakri, IATA’s senior vice president, “China is one of the most advanced countries in the world in the adoption of digital currency.” With this integration, the digital yuan will become the 74th currency processed by IATA, as the organization prepares for full adoption by the end of the year.
**China to Revise AML Law to Address Risks Linked to Virtual Assets**
Earlier this year, China revealed plans to revise its outdated Anti-Money-Laundering (AML) law to address the rising risks associated with virtual assets. This initiative comes as the country’s AML legislation has remained largely unchanged for over 17 years, failing to adapt to the emergence of cryptocurrencies such as Bitcoin.
Andrew Fei, a partner at the law firm King & Wood Mallesons in Hong Kong, emphasized the necessity of updating China’s AML law to address the risks posed by virtual assets, given the considerable evolution of international standards and best practices. The Financial Action Task Force (FATF), an intergovernmental organization focused on combating money laundering and terrorist financing, has already provided comprehensive recommendations for addressing virtual assets in the proposed amendment to the AML law.
While the FATF has rated mainland China as “largely compliant” with its AML recommendations related to virtual assets, the country’s prohibition of cryptocurrency activities has exempted it from several criteria.
