April 27, 2023
By Sharan Kaur Phillora
China is enlarging the application of its digital yuan or e-CNY, to ease trade and cross-border transactions within its Belt and Road initiative, media reports said.
Here’s what we know:
Plans have been made to encourage the usage of digital yuan for paying service fees and storage charges for goods transported by cross-border trains departing from Xuzhou city, which is the originating point for many goods trains bound for Europe.
The experiment, which is set to be launched in Xuzhou City, will extend the usage of the digital yuan to pay taxes and utility services in the city in the future. Jiangsu province has taken significant steps towards advancing the use cases of digital yuan. Changshu, a city within the province, recently announced that it would pay civil servants and people who work for public institutions using the digital yuan.
Using the digital yuan for cross-border payments will be experimented with in the Guangdong-Hong Kong-Macau Greater Bay Area, according to the Hong Kong Monetary Authority (HKMA).
Darryl Chan, the deputy chief executive of HKMA, has stated that they are collaborating with the People’s Bank of China to experiment with the digital yuan’s potential as a cross-border payment mechanism in Hong Kong.
Chan further mentioned that HKMA, along with China and two other nations, is exploring a cross-border initiative with Thailand and the United Arab Emirates to enhance the efficacy and minimize the expenses associated with cross-border transactions.
The Chinese government’s ramped-up efforts to develop and test the CBDC come when international trade markets move away from the standard U.S. dollar. Recently, China has completed multiple trade treaties with Russia and India based on their national currency over the U.S. dollar.
About the author
Sharan Kaur Phillora’s thirst for knowledge has led her to study many different subjects, including NFTs and Blockchain technology – two emerging technologies that will change how we interact with each other in the future. When she isn’t exploring a new idea or concept, she enjoys reading literary masterpieces.