China Records First Cross-Border Settlement for Precious Metals Using e-CNY CBDC
China recorded its first-ever cross-border settlement for precious metals using the digital yuan central bank digital currency (CBDC), also known as the e-CNY. On December 20, 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.
This development marks a major step forward in China's efforts to promote the use of its digital currency in international trade. The Bank of China highlighted the importance of the settlement in supporting Shanghai's free trade pilot zone strategy and enhancing the quality of the international trade center.
Bank of China Shanghai has been actively involved in the digital yuan pilot testing and has facilitated various transactions using the CBDC, including the import of iron ore to China. The bank also collaborates with foreign institutions, such as Standard Chartered, to advance the development of the digital yuan.
Chinese President Xi Jinping has emphasized the significance of CBDCs in cross-border trade, and several foreign banks have joined China's ongoing CBDC trials. Singapore has also announced that it will allow Chinese tourists to spend digital yuan during their visits to the country.
On December 1, China signed a $400 million memorandum on CBDC cooperation with the United Arab Emirates, further expanding its international reach. Last month, China’s Shanghai Petroleum and Natural Gas Exchange settled its first oil deal using the e-CNY.
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