- The Shanghai Clearing House has launched digital yuan clearing and settlement services for commodity trading.
- This move highlights the growing institutional acceptance of the digital yuan and its potential to revolutionize financial transactions in China.
- Recent developments such as the introduction of digital yuan payments for urban rail transit fees and surge in digital yuan usage during the 618 Festival further demonstrate its growing popularity among consumers in China.
Introduction of Digital Yuan Services for Commodity Trading
The Shanghai Clearing House, a financial institution under China’s central bank, has introduced digital yuan clearing and settlement services for commodity trading, enhancing cross-border transactions and promoting the internationalization of China’s currency. This move highlights the growing institutional acceptance of the digital yuan and its potential to revolutionize financial transactions in the country. With these new services, traders can conduct cross-bank clearings and settlements using digital currency for commodities.
Digital Yuan Adoption in Commodity Trading
In October 2022, the Shandong International Commodity Exchange reportedly executed a 1M yuan settlement for imported rubber using the digital yuan, marking an early milestone for CBDC. Moreover, Qingdao City recently introduced digital yuan payments for urban rail transit fees to enable users to pay conveniently with this official currency. During this year’s 618 Festival, JD.com saw a 254% increase in transaction volumes with digital currency compared to last year.
The Chinese government has decided to start paying civil servants using digital currency starting May 2023 to promote wider adoption among government personnel, teachers, healthcare professionals, journalists etc.. This move is expected to drive more widespread use of this official currency across various sectors within China.