Shanghai’s financial sector has marked a notable development with the completion of its first cross-border transaction using the digital yuan, known as e-CNY. This transaction, facilitated by the Shanghai Financial Exchange International Board on December 20, saw the Bank of China’s Shanghai branch successfully conduct a 100 million yuan ($14 million) e-CNY settlement for a gold purchase from overseas.
The Bank of China Shanghai, an active participant in the digital yuan pilot program, has been instrumental in integrating the e-CNY into international trade. The branch’s recent transaction for iron ore imports using the e-CNY is a testament to its commitment to this initiative. The branch’s collaborations with global financial institutions, like France’s BNP Paribas, play a significant role in furthering the digital yuan’s adoption.
The relevance of Central Bank Digital Currencies (CBDCs) in cross-border trade was highlighted by Chinese President Xi Jinping at the Shanghai Cooperation Organisation Summit in July 2023. This has led to increased international engagement in China’s CBDC trials, with various foreign banks participating and Singapore allowing Chinese tourists to use digital yuan.
On December 1, China strengthened its international CBDC relationships with a $400 million memorandum of understanding on CBDC cooperation with the United Arab Emirates.
Coinciding with these developments, the latest update to the official digital yuan app was released on December 19. This update introduces functionalities allowing users to create a digital yuan wallet using their phone number, secure their wallet in case of phone loss, and manage their password and private keys. The app also enables the binding of personal bank accounts and debit cards for convenient digital yuan acquisitions.