The Shanghai branch of the Bank of China has completed the first settlement of precious metals using the digital yuan.
The South China Morning Post claims that the Bank of China, a commercial bank based in Beijing, has completed the first cross-border settlement for trade in precious metals using digital yuan.
This means that the bank plans to extend the use of the nation’s digital currency. A $14 million cash settlement from an overseas buyer was apparently carried out by the state-owned bank’s Shanghai branch, which also deposited the money as digital yuan into an account managed by the Shanghai Gold Exchange.
According to reports, the transaction also entails cooperation with the bank’s Hong Kong branch. The Bank of China has a history of actively participating in various digital transactions through pilot programs employing the nation’s Central Bank Digital Currency (CBDC).
For instance, the bank’s most recent initiative, which sought to encourage digital yuan among the French institution’s business clients in China, culminated in a partnership with BNP Paribas in May.
As of July, there were 950 million e-yuan transactions in China, totaling 1.8 trillion yuan. This indicates a considerable increase in the country’s adoption of digital yuan.
During a seminar in late November in Hong Kong, former governor of the People’s Bank of China Zhou Xiaochuan, who held the position for 16 years until 2018, noted that the country is getting close to the end of its multi-year digital yuan pilot program, saying that the “final stage is not very far away.”
About 90% of retail payments in China have already been digitalized, according to Xiaochuan, who also underlined the substantial commercial potential in cross-border payments that central bankers should consider and investigate.
