China To Expand Use Cases Of Digital Yuan To Cross-Border Trades And Road Initiative

April 25, 2023

China To Expand Use Cases Of Digital Yuan To Cross Border Trades And Road Initiative

China which was one of the first nations to start working on CBDC plans to expand the use cases of its CBDC called Digital Yuan for facilitating cross–border trade, belt, and road initiatives. Even though Digital Yuan was one of the first CBDCs that was developed and tested widely, there has not been any official launch by the government.

The plan to promote the use of the Digital Yuan in cross–border trade was issued for Xuzhou, the Chinese city that serves as a departure point for several goods trains between China and Europe. Reportedly, there are 18 regular cross–border rail connections running from the city to other 21 nations in Asia and Europe.

As a result, Xuzhou is the trade hub where Digital Yuan is planned to be used for paying services and storage costs for carrying goods by cross–border trains. Moreover, through this experiment plans to extend Digital Yuan the country sees CBDC paying taxes and utility services for the city shortly.

Alongside, Jiangsu province is also known for promoting Digital Yuan. While Changshu City also announced that it would pay civil servants and public institutions too. Besides, Xuzhou, the Hong Kong Monetary Authority ( HKMA) also stated that their Greater Bay Area, Guangdong-Hong Kong-Macao acts as a ground for making cross–border payments using Digital Yuan.

The Chinese government has ramped up the CBDC efforts while the international trade markets are moving away from the US dollar. Alongside, China has also completed multiple trade treaties with Russia and India based on their national currency instead of the US dollar.

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