The HarmonyOS NEXT, also referred to as HarmonyOS 5.0, was officially unveiled on October 22, 2023.
China’s central bank digital currency (CBDC), the digital yuan, is being integrated into Huawei’s HarmonyOS NEXT operating system.
By making it easier to use digital yuan on Huawei devices, the integration seeks to improve accessibility for an estimated 1 billion smartphone users.
On October 22, 2023, the HarmonyOS NEXT—also known as HarmonyOS 5.0—was formally introduced.
HarmonyOS NEXT Marks Huawei’s Third Operating System
Huawei’s third operating system, HarmonyOS NEXT, is the first that was created entirely in-house.
With its ability to support apps created especially for HarmonyOS, HarmonyOS NEXT stands out from its predecessors as the third most popular operating system in the world, behind only iOS and Android.
The creation of HarmonyOS came after the U.S. government placed restrictions on Huawei in 2019, which forced the company to develop outside of Google’s ecosystem.
The operating system was first released for wearables and smart TVs, but in 2021 it started to make inroads into the smartphone market, with plans to incorporate the digital yuan already in the works.
The most recent integration will make the CBDC even easier to use by eliminating the need for users to download an additional digital yuan app.
Interoperability with other financial apps and improvements to wallet management are also expected.
Plans are also underway to expand the digital yuan’s functionality across multiple platforms by integrating it into different chips and Internet of Things (IoT) devices.
This integration will strengthen the People’s Bank of China’s capacity to supervise digital currency transactions by providing enhanced security and monitoring.
With 22.6 million digital yuan wallets in the hands of locals, the digital yuan has been making slow but noticeable progress. It was recently showcased at events like the 2024 China Science Fiction Conference and the Craft Beer Festival in Beijing.
The International Air Transport Association (IATA) declared on October 29 that it would begin to accept digital currencies, with the digital yuan serving as the first option. This announcement was a significant step for the global aviation industry.
“China is one of the most advanced countries in the world in the adoption of digital currency,” stated Muhammad Albakri, senior vice president of IATA.
As IATA gets ready to integrate it by the end of the year, the digital yuan will be the 74th currency it processes.
China to Revise AML Law to Address Risks Associated with Virtual Assets
In an effort to address the growing risks connected to virtual assets, China declared earlier this year that it would update its antiquated Anti-Money-Laundering (AML) legislation.
The action was taken because the nation’s anti-money laundering laws, which were passed more than 17 years ago, have not changed much since then and have not taken into consideration the rise of cryptocurrencies like Bitcoin.
The substantial evolution of international standards and best practices, according to Andrew Fei, a partner at Hong Kong-based King & Wood Mallesons, makes it necessary to amend China’s AML law to address risks related to virtual assets.
The proposed amendment to the AML law already includes specific recommendations to address virtual assets from the Financial Action Task Force (FATF), an intergovernmental body that fights money laundering and terrorist financing.
The FATF classified mainland China as “largely compliant” with AML recommendations pertaining to virtual assets; however, the country was exempt from several criteria due to its ban on cryptocurrency activities.