Chinese Bank Connects Digital Yuan to Largest Small Commodities Market
A state-owned Chinese bank, the Bank of China, has partnered with the city of Yiwu to link the digital yuan to its payment platform, Yiwu Pay. The Bank of China is a leading commercial bank majority-owned by the Chinese state. Yiwu’s Futian District is home to a massive market that sells small commodities to importers worldwide. Yiwu Pay, launched earlier this year, is a global payment platform that supports payments in 16 fiat currencies. The new deal will enable digital yuan interoperability on the platform and allow merchants to process cross-border payments in the digital currency. It will also provide compliance solutions for digital yuan customers and adhere to foreign exchange compliance protocols.
Yiwu’s Impressive Adoption of Digital Yuan
Yiwu had previously announced that 90% of its vendors accept digital yuan payments, with a goal of processing $1.5 billion worth of CBDC transactions by the end of the year. Known as the “world’s capital of small commodities,” Yiwu manufactures and trades various items and has established trade relations with over 230 countries and regions. While its physical marketplace remains popular, the city has been expanding its online presence by supplying international e-commerce platforms. This partnership between the Bank of China and Yiwu further strengthens China’s efforts to promote the use of digital yuan in cross-border payments.
Hot Take: Digital Yuan Expands Its Reach
The integration of the digital yuan with Yiwu’s payment platform is a significant development in China’s push for global adoption of its central bank digital currency (CBDC). By connecting to the “world’s biggest small commodities market,” China aims to establish the digital yuan as a widely accepted form of payment for international trade. Yiwu’s extensive trade network and the popularity of its marketplace make it an ideal location to promote the use of digital yuan in cross-border transactions. As China continues to expand its efforts in cross-border payments, it signals a growing trend towards the integration of CBDCs into the global financial system.
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