Bank of China Hong Kong Completes First Digital Yuan-Based Trade
The Bank of China Hong Kong, the second largest bank in the region, has made history by finalizing its first cross-border digital yuan-based trade. In collaboration with its sibling bank, the Bank of China, the transaction involved receiving payment for an imported iron ore commodity bulk trade. This milestone has established the digital yuan as a viable option for settlements of this nature.
Bank of China Enables Cross-Border Payments with Digital Yuan
The Bank of China has paved the way for companies to settle their cross-border payments using the digital yuan, China’s central bank digital currency (CBDC). This achievement marks a significant milestone for the Hong Kong branch of the bank, which acted as an intermediary for the settlement of a $3.4 million bulk commodity payment between Baosteel group and Bao-trans Enterprises.
Bank of China Facilitates Landmark Digital Yuan Trade
The Bank of China’s subsidiary in Hong Kong and its mainland-based branch collaborated to support this transaction. They set up digital yuan wallets to receive the payment for an order of imported iron ore in the name of Bao-trans Enterprises. This is the first time the Bank of China has acted as an intermediary for a commodity bulk settlement using the digital yuan.
Bank of China Hong Kong Deputy Chief Executives Praises Digital Yuan
Xing Guiwei, Deputy Chief Executive of the Bank of China Hong Kong, lauded the benefits of the digital yuan in this application. Guiwei emphasized that in addition to retail payments, the digital yuan can also be used for international settlements. He believes that this milestone serves to extend the use of the digital yuan on an international level and supports the further development of yuan internationalization.
China’s Advancements in Digital Yuan Internationalization
China has been making progress in the internationalization of its digital currency. Standard Chartered began offering digital yuan exchange services in China in November, and the People’s Bank of China (PBOC) collaborated with the Monetary Authority of Singapore (MAS) to allow digital yuan spending for tourists from both countries. These initiatives are part of China’s efforts to increase the global use of the digital yuan.
Hot Take: Digital Yuan Gains Ground in Cross-Border Settlements
The completion of the Bank of China Hong Kong’s first cross-border digital yuan-based trade represents a significant step forward for the digital yuan’s acceptance in the international business community. By facilitating a $3.4 million bulk commodity payment, the Bank of China has demonstrated the viability and efficiency of using the digital yuan for cross-border settlements. This achievement not only strengthens China’s position as a leader in central bank digital currencies but also paves the way for wider adoption of the digital yuan in future international trade transactions.
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