China plans to expand the use of the digital yuan for the Belt-Road project and cross-border payments.
As one of the first countries to start working on CBDCs, China has not yet officially launched the CBDC, although the development of the digital currency has been completed.
CBDC Test Sites Proliferate
The city of Xuzhou, which serves as the departure point for many commercial trains from China to Europe, has released a plan to encourage the use of Chinese digital currency in cross-border trade.
According to the news of the South China Morning Post, there are 18 regular cross-border rail connections from the city to 21 countries in Asia and Europe. Xuzhou, a commercial hub, plans to promote the use of digital yuan to pay for service and storage fees for goods transported by cross-border trains. This upcoming implementation aims to expand the use of e-CNY to pay taxes and utilities in the city in the future.
Alongside Xuzhou, the Hong Kong Monetary Authority announced that the Guangdong-Hong Kong-Macau Greater Bay Area will be a testing ground for making cross-border payments using digital yuan.
However, Jiangsu province has been very proactive in promoting digital yuan use cases. Changshu, another city in the province, also announced that it will pay government officials and people working in public institutions using digital yuan.
Darryl Chan, Deputy Director General of the Hong Kong Monetary Authority (HKMA), said: “HKMA is working with the People’s Bank of China to test the digital Yuan as a cross-border payment instrument in Hong Kong.”
Chan added that another cross-border project involving Thailand and the United Arab Emirates is being studied by HKMA, China and two other countries with the aim of increasing efficiency and reducing the cost of cross-border transactions.
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