The Bank of China Completes First Cross-Border Digital Yuan Transaction
The Bank of China’s Shanghai Branch has successfully completed the first cross-border digital yuan (RMB) transaction in partnership with the Shanghai Gold Exchange. The transaction involved a 100 million yuan settlement in a precious metal.
China Expands Digital RMB Payments Internationally
This transaction marks the debut of international digital RMB payments as China continues its central bank digital currency (CBDC) retail pilot at scale domestically.
Collaboration Between Bank of China and BOC Hong Kong
The Bank of China Shanghai Branch collaborated with its RMB Trading Business Headquarters and BOC Hong Kong to facilitate this digital transaction. The branch emphasized the synergy between the local and Hong Kong branches in executing this milestone payment.
CBDCs Gain Momentum
In October, a Chinese foreign exchange regulator highlighted the unique programmable features of CBDCs and their potential to enhance monetary policy tools. Chinese banks have actively participated in trials by the Bank of International Settlements, positioning China at the forefront of CBDC implementation.
Global Interest in CBDC Adoption
According to data from the Atlantic Council, 130 countries representing 98% of the world’s GDP are actively considering CBDC adoption. This signifies a significant increase since May 2020, when only 35 countries were in that stage. Among the G20 nations, 19 countries have reached the advanced pilot stage of CBDC development.
Stablecoins and Central Bank Digital Currencies
Central banks are also paying attention to stablecoin adoption, as highlighted by Bank of Korea Governor Rhee Chang-Yong. The governor emphasized the need for central banks to accelerate the deployment of their digital currencies to ensure stability and maintain control in the evolving monetary landscape.
Hot Take: China Leads the Way in CBDC Implementation
The completion of the first cross-border digital yuan transaction by the Bank of China demonstrates China’s progress in implementing its central bank digital currency. With active participation from state-owned Chinese banks and a growing global interest in CBDC adoption, China is positioning itself as a leader in the development and use of digital currencies. As other countries continue to explore the possibilities of CBDCs, China’s advancements serve as a model for future implementations and highlight the potential for programmable features to enhance monetary policy tools.
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