The first-ever cross-border settlement for precious metals using the digital yuan central bank digital currency (CBDC), also known as the e-CNY, was recorded on Dec. 20.
According to local news reports, the Bank of China’s Shanghai branch successfully transferred a 100 million yuan ($14 million) e-CNY CBDC settlement received overseas for gold via the Shanghai Financial Exchange International Board.
“The account will contribute financial strength to support Shanghai’s in-depth implementation of the free trade pilot zone promotion strategy and promote the quality and upgrading of the international trade center,” a spokesperson for the Bank of China wrote.
Bank of China Shanghai is currently one of the lead supporters of digital yuan pilot testing and recently facilitated the import of iron ore to China via the CBDC. The firm also partners with foreign institutions, such as France’s BNP Paribas, to develop the digital yuan.
Chinese President Xi Jinping officially praised, for better or for worse, the importance of CBDCs in cross-border trade during an address to the July 2023 Shanghai Cooperation Organisation Summit. Since then, various foreign banks have joined China’s ongoing CBDC trials, while Singapore announced that it would allow Chinese tourists to spend digital yuan inside the island country during their trips. On Dec. 1, China signed a $400 million memorandum on CBDC cooperation with the United Arab Emirates.
On Dec. 19, the latest update for the official digital yuan app was released. The version allows users to create a digital yuan wallet using their phone number, disable their wallet in case their phone is lost, and reset their password and private keys. Users can also bind their personal bank accounts and debit cards to purchase digital yuan in-wallet.
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