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Chinese national digital currency has been used to facilitate transactions in the country’s futures market for the first time, official media revealed. The commodities exchange in Dalian has utilized the digital yuan for the payment of storage fees with help from major banks.
Dalian Commodity Exchange Uses Digital Yuan in Futures Transaction
China’s digital yuan (e-CNY) has debuted in the domestic futures market, the state-run Xinhua news agency announced, quoting the China Securities Journal on Tuesday. The commodity exchange in Northeast China’s financial center, Dalian, and two major banks took part in the trial.
The central bank digital currency (CBDC) has been used by the Dalian Commodity Exchange (DCE) for the payment of storage fees to a delivery warehouse. The local branches of Bank of Communications and Bank of China supported the transaction. Citing sources from the financial institutions, the report detailed:
The application of e-CNY in the futures market provided an efficient, zero-cost and safe payment alternative for futures exchanges and market participants through real-time inter-bank payment.
A digital yuan payment has no transaction fees and “is not restricted to the operation period of the high-value payment system,” noted Jiang Bin, manager of the delivery warehouse. In addition to these features, the digital yuan would also bring convenience to Chinese enterprises by showing real-time transaction progress.
China Pushes Forward With E-CNY Implementation
The DCE further emphasized it will continue to promote business innovation in the region. The commodities exchange plans to expand the use of the digital yuan while at the same time “ensuring a safe and stable operation in the market.”
In the past couple of years, China has been actively testing the digital currency issued by the People’s Bank of China. The government has launched multiple e-CNY pilots across the country with the digital yuan finding applications in over 1.32 million scenarios as of June 30. These range from utility payments, shopping, and catering to transportation and government services, Xinhua added. Dalian joined the trials in November 2020.
Authorities in five other major cities – Shenzhen, Suzhou, Beijing, Chengdu, and Shanghai – have dispersed around $35 million of digital yuan in red envelope campaigns, a report by the Tuoluo Research Institute revealed in July. That’s from a total of over $41 million in e-CNY distributed among Chinese citizens nationwide.
What other applications for the digital yuan do you expect from China in the future? Tell us in the comments section below.
