The Chinese government is expanding the use cases of its Central Bank Digital Currency (CBDC) or Digital Yuan, also referred to as e-CNY, to increase its use in the Belt and Road Initiative as well as in cross-border trades. As the first CBDC widely tested and developed, the digital yuan is currently undergoing trails in multiple cities in the People's Republic of China with millions of people being involved in it. Xuzhou city, one of the main departure points for goods trains headed towards Europe, has formulated a plan to make use of digital Yuan in order to pay for storage, taxes and utility services in the city. Other cities in Jiangsu province such as Changshu have also taken part in promoting CBDC use by paying the civil servants and public institution workers digitally.

The Hong Kong Monetary Authority (HKMA) further signed an agreement in order to push for the use of digital Yuan for cross-border payments through the Guangdong-Hong Kong-Macau Greater Bay Area, as well as other multi-nations such as Thailand and the United Arab Emirates. Moreover, the Chinese government has also been actively taking part in carrying out trade deals with other nations such as India and Russia utilizing the national currency over the U.S. Dollar.

The role played by CBDC in the international market has been vital with the digital yuan being used to facilitate smoother and cost-effective cross-border trade, reducing the need of the U.S. Dollar and the expenses of having an intermediary, thereby effectively grooming an efficient and cost-effective market. The digital Yuan, along with China’s efforts to promote its use and push the impact on the international market will surely prove to be a major benefit in the years to come.



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