PBoC completes the first international settlement using its CBDC
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The People’s Bank of China’s (PBoC) branch in Shanghai recently made a major milestone regarding its central bank digital currency (CBDC), the digital yuan. Also known as e-CNY, the CBDC was used to complete the first cross-border settlement gold settlement.
The transaction, which marks a major achievement for the PBoC, took place on December 20, when the bank processed a 100 million yuan ($14 million) transaction for gold. To do this, it used the Shanghai Financial Exchange International Board.
Digital yuan moves on from strictly domestic use
The Shanghai branch has been a key participant in development and testing of the digital yuan. It also recently used the e-CNY to import iron ore into the country. Apart from that, the branch also collaborated with a number of international banks in order to expand its CBDC’s reach, with one example being France’s BNP Paribas.
Despite the fact that numerous countries’ central banks have been working on developing their own CBDCs for years, China’s digital yuan is the most advanced central bank digital currency, by far. Initially, its focus was on the development and launch of a CBDC for domestic purposes. However, cross-border trials in Hong Kong started gaining momentum some time ago.
Then, earlier this year, China’s own president, Xi Jinping, highlighted the potential use of digital yuan in international trade. He mentioned it during the Shanghai Cooperation Organization Summit that took place in July.
After this, a number of foreign banks decided to start participating in China’s CBDC trials. Furthermore, Singapore has decided to open the doors to tourists from China who used digital yuan. China even reached a deal with the UAE on December 1, signing a $400 million memorandum on CBDC cooperation.
PBoC added new features to the digital yuan app
The country’s latest report regarding its official digital yuan app came earlier this week, on December 19. In it, it said that the app now has a number of new features. One of them is the ability to create a personal digital yuan wallet. All that users need to do this is a phone number.
Apart from that, the bank also introduced a feature that would disable the wallet, just in case of phone loss or theft of the device. Users could also reset their passwords and private keys in order to increase the security of their CBDC funds. Apart from that, the bank also introduced a feature that allows users to link their debit cards and bank account in order to purchase digital yuan directly from the app.
PBoC’s spokesperson said that the account will contribute financial strength in order to support Shanghai’s in-depth implementation of the free trade pilot zone promotion strategy. In addition, it will also promote the quality and upgrading of the international trade center.
