There’s been quite a bit of speculation about China’s digital yuan‘s potential to be used internationally. But most official announcements have emphasized domestic use of the central bank digital currency (CBDC). Trials of the CBDC are progressing in four regions and the Winter Olympics locations. However, plans issued by one of those four regions, Xiongan New Area, outline the use of the digital yuan or DCEP for cross border trade.
The plans state that it will: “Encourage the use of RMB-denominated settlement in cross-border e-commerce activities, and explore cross-border payments in digital currencies.”
It’s possible the official stance and Xiongan’s plans are not incompatible. It’s a matter of timing. That’s because Xiongan is a new smart city that is largely still under construction. So in the first instance, the domestic use of a digital renminbi is the focus. But it seems that international use is on the cards. Also, any cross border testing would almost certainly require the involvement of the People’s Bank of China, the central bank.
Xiongan New Area is a smart city announced in 2017 and closely associated with President Xi. It’s located 100 kilometers southwest of Beijing. The high tech city will house offices for some of China’s biggest technology firms, including Alibaba, Tencent, Baidu and JD.com.
Meanwhile, the latest screenshots of the DCEP trials were revealed over the weekend and more details were disclosed about the different types of wallet limits. The currency is intended to have controllable anonymity so that larger transactions will be monitored.