The Shanghai Clearing House, the central bank’s financial services clearing counterparty in China, has launched clearing and settlement services for the digital yuan. This move is aimed at facilitating the institutional adoption of China’s Central Bank Digital Currency (CBDC) and allows for cross-border settlements on commodities using the digital yuan. The Shanghai Clearing House will handle the operations of these services, which could boost the international adoption of the Chinese yuan and improve the security and cost-effectiveness of cross-border commodities settlements. This is not China’s first time using the digital yuan for commodity trading, as a settlement on imported rubber using digital yuan was promoted in October 2022.
China’s CBDC adoption is also expanding in terms of retail usage. Qingdao City launched the first digital yuan payments for urban rail transit fees, allowing users to pay for subway transport fares using digital yuan hardware wallets embedded in their mobile SIM cards. JD.com, a leading online shopping platform, reported increased digital yuan transactions during the 618 Festival, China’s second-largest shopping festival. Other provinces in China, such as Jiangsu Province, have also implemented campaigns to promote the adoption of the digital yuan, enabling CBDC payments for tuition, accommodation fees, on-campus purchases, and more. The government plans to add more utilities to further expand CBDC adoption in educational institutions and has gained support from leading third-party payment platforms, Alipay and WeChat Pay, which now support digital yuan payments on various mobile applications.
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