The Chinese central bank’s financial services clearing counterparty, the Shanghai Clearing House, launched digital yuan (a CBDC) clearing and settlement services on Monday, July 26.
According to a June 26 announcement, the latest services enable cross-border settlements on commodities using the digital yuan. This move marks another step in China’s efforts to facilitate the institutional adoption of its Central Bank Digital Currency (CBDC).
China’s Digital Yuan Gains Utility In Commodities Settlement
The Shanghai Clearing House, which handles interest rates, bonds, foreign exchange, credit, and commodities, would be in charge of the center of these operations of the newly launched digital yuan clearing and settlement services.
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Director of the Finance and Securities Institute of the Wuhan University of Science, Dong Dengxin, said the development could boost the Chinese yuan (RMD)’s international adoption. The newly launched digital yuan clearing services could also improve the security and cost-effectiveness of cross-border commodities settlements in China.
This digital RMD clearing and settlement service isn’t China’s first time adopting the digital yuan for commodity trading though. In October 2022, the Shandon International Commodity Exchange promoted a ¥1 million settlement on imported rubber using digital yuan. That was the first digital yuan commodity trading transaction in the Qingdao area of China.
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Author: Kent Glory
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