Shanghai Clearing House adds support for digital yuan in commodity trading
Shanghai Clearing House, a financial institution under China’s central bank, has introduced digital yuan clearing and settlement services for commodity trading, enhancing cross-border transactions and promoting the internationalization of China’s currency.
China expanding digital yuan adoption
The Shanghai Clearing House has taken a remarkable step towards integrating China‘s central bank digital currency (CBDC), commonly known as the digital yuan, into the world of commodity trading. This move highlights the growing institutional acceptance of the digital yuan and its potential to revolutionize financial transactions in the country.
With the newly launched services, traders can conduct cross-bank clearings and settlements using the digital yuan for commodities. The team says this development offers several benefits, including security, cost-effectiveness, and simplified cross-border transactions. Experts believe this initiative could further propel the internationalization of China’s digital currency.
This is not the first instance of digital yuan adoption in commodity trading. In October 2022, the Shandong International Commodity Exchange reportedly executed a 1M yuan settlement for imported rubber using the digital yuan, marking an early milestone for the CBDC.
The adoption of the digital yuan is not limited to commodity trading. Recently, Qingdao City introduced digital yuan payments for urban rail transit fees, enabling users to pay using digital currency conveniently.
Moreover, during the 618 Festival, JD.com, a leading online shopping platform, witnessed a staggering 254% increase in digital yuan transactions compared to the previous year, with transaction volumes setting new records. This surge in digital yuan usage demonstrates its growing popularity among consumers in China.
These developments come after the Chinese government decided to pay civil servants using the digital yuan starting in May 2023. This move aims to promote wider adoption of the official digital currency, particularly among government personnel, teachers, healthcare professionals, journalists, accredited media technicians, and state-owned business employees.
The introduction of the digital yuan for salary payments further solidifies its status as an official means of exchange.