Blockchain for Banking News

China uses digital RMB for gold, iron cross border payments

digital yuan currency cbdc RMB renminbi

Yesterday the Chinese press reported that China’s central bank digital currency (CBDC), the digital RMB was used for cross border precious metal payments. The Bank of China worked with the Shanghai Gold Exchange to enable the settlement of a 100 million RMB ($14m) gold trade. The transaction spanned Shanghai and Hong Kong, with Bank of China Hong Kong also involved. Bank of China is the country’s second largest bank and one of the big four state-owned banks.

Recently the Bank of China also participated in a cross border transaction for iron ore. That one involved Hong Kong and China’s Baowu, the state-owned iron and steel company.

Meanwhile, China’s first cross border digital yuan usage for a commodities payment came in October when PetroChina used the CBDC.

Every organization mentioned here is owned by the Chinese state. In 2017 the World Bank estimated that Chinese state-owned enterprises account for 23-28% of GDP. With those sorts of numbers, it’s hard for a CBDC to fail.

In October China formally signed an agreement with the UAE for digital RMB collaboration. The UAE is also one of four countries involved in the mBridge project, a wholesale CBDC solution for cross border payments that integrates with the retail digital RMB. mBridge is expected to launch a minimum viable product in mid-2024.

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