The Shanghai Clearing House, a financial institution under China’s central bank, has introduced digital yuan clearing and settlement services for commodity trading. This move showcases the institutional acceptance of the digital yuan and its potential to transform financial transactions in China. Traders can now conduct cross-bank clearings and settlements using the digital yuan, offering benefits such as security, cost-effectiveness, and simplified cross-border transactions. Experts believe that this initiative could boost the internationalization of China’s digital currency. The digital yuan has already been adopted in commodity trading, with the Shandong International Commodity Exchange executing a 1M yuan settlement for imported rubber using the digital currency last year. Additionally, the digital yuan is being used for urban rail transit fees in Qingdao City and has seen a significant surge in transactions during the 618 Festival on the JD.com platform. The Chinese government has also decided to pay civil servants using the digital yuan starting in May 2023, further solidifying its status as an official means of exchange.
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