Today, state run website People China published a report about the internationalization of the yuan or RMB. While the article only mentioned China’s central bank digital currency (CBDC) or digital yuan a couple of times, the conclusion considered a digital yuan as a medium to long-term strategy for internationalizing the RMB. It stated that one could “take the cross-border use of the digital renminbi as an example (of) the breakthrough point to build an international settlement network for mobile payments.”
China’s short-term goals for the digital yuan are domestic, with the aim of providing an alternative to mobile payments giants Alipay and WeChat Pay. But longer-term there is clear potential for the use of the digital yuan cross border.
China is already involved in at least two formal cross border projects for the digital yuan. Firstly, it has been working with the Hong Kong Monetary Authority to enable Hong Kong visitors to use the digital currency when visiting China, and vice versa. It’s also involved in a BIS initiative, the Multi-CBDC (M-CBDC) Bridge project with Thailand, Hong Kong and the UAE. This is a wholesale bank only project to enable instant cross border payments. However, it could form the backbone for mobile payments.
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