- Historic Transaction: The Bank of China’s Shanghai Branch conducted the first international digital yuan transaction, marking a milestone in cross-border digital RMB payments.
- Global CBDC Interest: China’s progress in CBDC development has attracted global attention, as numerous countries explore and consider adoption, showcasing the increasing global interest in digital currencies.
China achieved a groundbreaking feat as the Bank of China’s Shanghai Branch conducted the inaugural international digital yuan transaction, settling a 100 million yuan trade in collaboration with the Shanghai Gold Exchange.
Trailblazing Cross-Border Digital Yuan Transaction
Amidst the accelerated rollout of China’s central bank digital currency (CBDC) within its borders, the Bank of China’s Shanghai Branch marked history by executing the premier international digital RMB payment. This pivotal transaction signifies a significant stride in the practical implementation of cross-border digital yuan transactions.
The successful transaction was a result of a strategic partnership between the Bank of China Shanghai Branch, its RMB Trading Business Headquarters, and BOC Hong Kong. A spokesperson for the Shanghai Branch emphasized the harmonious synergy between local and Hong Kong branches in executing this groundbreaking digital transaction.
Reports highlight that this isn’t the first foray into digital RMB payments by the Bank of China’s Shanghai Branch. Previously, the branch facilitated a cross-border digital RMB payment in the commodities domain, notably purchasing imported iron ore for Baowu Group using digital currency.
Additionally, the bank has been instrumental in developing crucial system support for foreign financial institutions, exemplified by launching a digital RMB project for BNP Paribas (China) and facilitating digital RMB business and payment systems.
Also Read: Alibaba’s Alipay & Taobao Platform to Roll Out Digital Yuan Pay Functions
Accelerating CBDC Advancements and Global Interest
China’s strides in CBDC development have garnered international attention, particularly emphasizing the unique programmable features of CBDCs. Analysts and foreign exchange regulators have highlighted the potential for CBDCs to augment the effectiveness of monetary policy tools significantly.
Recent developments have showcased Chinese state-owned banks actively participating in trials facilitated by the Bank of International Settlements, solidifying China’s focus on cross-border digital currency transactions. This positions the country at the forefront of global digital currency implementation.
Recent data from the Atlantic Council reveals a substantial increase in countries actively considering CBDC adoption. This surge in interest is noteworthy, with 130 countries, constituting 98% of the world’s GDP, exploring CBDC adoption, marking a stark rise from a mere 35 countries in May 2020.
Meanwhile, the embrace of stablecoins has also piqued the curiosity of central banks worldwide, prompting discussions on potential challenges to financial stability, as highlighted by Bank of Korea Governor Rhee Chang-Yong. In light of this, Governor Rhee underscored the urgency for central banks to expedite the deployment of their digital currencies to ensure stability and assert control in the swiftly evolving monetary landscape.
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