The digital Chinese yuan, known as e-CNY or digital RMB central bank digital currency (CBDC), was recently utilized for the first time in the settlement of precious metals across borders. Reports from local sources highlighted that the Shanghai branch of the Bank of China successfully converted 100 million yuan (equivalent to $14 million) of the e-renminbi CBDC received from overseas into gold through the Shanghai Financial Exchange International Board.
A spokesperson for the Bank of China mentioned that this transaction aims to bolster Shanghai's financial capabilities in supporting the free trade pilot zone promotion strategy and enhancing the development of the international trade center.
The Bank of China's Shanghai branch has been actively engaged in digital yuan pilot programs. It recently facilitated the importation of iron ore into China using the CBDC and collaborated with foreign entities like BNP Paribas to explore digital yuan initiatives.
Chinese President Xi Jinping, speaking at the Shanghai Cooperation Organization summit in July 2023, emphasized the significance of CBDCs in cross-border trade. Subsequently, various foreign banks have joined China's ongoing CBDC trials. Singapore has also announced plans to enable Chinese tourists to utilize the digital yuan within its borders while visiting. Moreover, China and the United Arab Emirates signed a significant CBDC cooperation memorandum worth US$400 million on December 1.
On December 19, the official digital renminbi application unveiled its latest update, offering features allowing users to establish a digital RMB wallet using their mobile phone number. This update also includes functionalities to disable the wallet in case of phone loss, reset passwords and private keys, and link personal bank accounts and debit cards to purchase digital renminbi within the wallets.
