Home
News
- Central Bank Digital Currency is a national digital currency of each country aiming for integrity in financial transactions.
- The second round of digital yuan trials set out this month.
- Digital yuan finding feasibility in the global financial world is crucial for the Chinese government.
Many countries have shown interest in developing their CBDCs (Central Bank Digital Currency). The main perspectives are strengthening financial systems, expanding financial inclusion to minorities, enabling efficient payment mechanisms, and improving monetary policies.
The Chinese CBDC aims to facilitate digital yuan as a means of payments across the world, thus increasing China’s impact on the global economy.
Compared to other countries, the Chinese CBDC is at a more advanced development stage.
The second round of digital yuan trial
Chinese island province Hainan is set to test digital yuan; trials will be conducted on Yongxing Island in Sansha city, between April 12 to April 25. The industrial and commercial bank of China’s Hainan branch, People’s Bank of China Haikou branch, and Sansha city’s municipal government will conduct the pilot.
It is the second batch of cities to test digital yuan. Other cities included are Shengai, Changsha, Qingdao, Dalian, and Xi’an cities are all expected to have pilots in the coming months.
Digital yuan aims for global adoption.
Finding technical feasibility between borders, mainstreaming legalities,
and regional financial integrations with trading partners are important internationalization of digital yuan.
Digital yuan aims to create transparency in financial transactions by storing data in an encrypted format. Privacy concerns are not at stake for Chinese citizens, all transactions are recorded, and the Chinese government is the only custodian of digital yuan.
Considering the stability of the currency, it can also increase its international transactions footprint. Currently, the Chinese yuan is the lowest traded, accounting for only 4.3 % of global transactions. With the release of the digital yuan, China can increase global currency transactions.
The Monetary Authority of Singapore (MOU) develops a more inclusive digital currency and more uniform messaging platform. Ubin project aims to settle issues in inter-bank transactions, cross-border payments and tokenized securities through distributed ledger technology.
In Conclusion
Many countries have started to try their hands on CBDC; it collaborates and finds common ground for international transactions that succeed.
Steve Anderson is an Australian crypto enthusiast. He is a specialist in management and trading for over 5 years. Steve has worked as a crypto trader, he loves learning about decentralisation, understanding the true potential of the blockchain.
