Chinese Firms and Banks Utilize Digital Yuan for Gold Recycling
Chinese companies, banks, and city governments are embracing the digital yuan to facilitate gold recycling and pay land registry fees. The Shenzhen Branch of the People’s Bank of China (PBoC) has partnered with the Shanghai Gold Exchange for a gold recycling project powered by the central bank digital currency (CBDC). Additional participants include the local government of Shenzhen’s Futian District, the Shenzhen Branch of the China Construction Bank, and gold trading firm Jinyafu. They are exploring the possibility of using the digital yuan for settlements in gold recycling, potentially leveraging Jinyafu’s CBDC-powered platform that enables real-time payments through mobile phone numbers or wallet ID numbers.
Growth in Gold Recycling and CBDC-powered Land Registry Deals in China
Gold recycling has gained popularity in China over the past decade, with recycled gold accounting for 20% of domestic supply in 2018. In another development, banks and real estate firms are collaborating on CBDC-powered land registry transactions. Fuqing, a city in Fujian province, achieved a record-breaking land registry fee payment of nearly $19 million through a China Merchants Bank digital yuan wallet. The city aims to continue innovating with the adoption of the digital yuan in various scenarios to enhance economic services and promote digital financial innovation. Recently, Chinese telecom firms also integrated e-CNY functions into their “Super SIM” cards.
Hot Take: Digital Yuan Expands Use Cases in China
The use of the digital yuan continues to expand in China as various industries explore its potential. The collaboration between financial institutions, government bodies, and companies highlights how CBDC adoption is being leveraged for gold recycling and land registry transactions. By integrating CBDC technology into existing platforms, such as Jinyafu’s gold recycling platform, real-time payments and settlements can be facilitated using the digital yuan. This not only streamlines processes but also showcases the versatility and efficiency of China’s digital currency. As more sectors embrace the digital yuan, it is expected to drive further innovation and transform economic services in the country.
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