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Chinese authorities admit the possibility of switching to international settlements in the digital yuan
Since last autumn, in a number of regions of China, an experiment was carried out to introduce a limited circulation of the digital yuan. Citizens received $ 30 in local currency, which they could spend at designated shops and food service establishments. The results of the experiment inspire the Chinese authorities to bring the digital yuan not only to the corporate settlements market, but also to the field of international finance.
Image Source: Nikkei Asian Review
The experiment involved six Chinese banks with a stake in the capital of which the state owns. The purpose of the experiment was to check the readiness of payment systems to work with digital state currency. Representatives of the trade and services sector were not fully satisfied with the results of the experiment, since they had to adapt their payment and accounting programs for a new type of currency, but customers liked the opportunity to pay for goods and services without commission. The experiment covered several thousand trade and service enterprises.
Last month, representatives from the People’s Bank of China met with counterparts from Thailand, the UAE and Hong Kong to discuss the possibility of using the digital yuan in international settlements. State media reported that other Southeast Asian countries also support the idea. Insurance companies have already taken part in the experiment — for the first time in the history of China, a large corporate contract was paid for with state digital currency last week.