China is evidently keen on expanding its digital yuan (CBDC) on an international scale, hinting at future integrations with CIPS and BRI.
According to a report by Alpha Factory (sourced from EastMoney), fintech enterprises like MOG Digitech Holdings are progressing in the CBDC domain and are considering global applications for the e-CNY.
Recent discussions at the Belt and Road Forum for International Cooperation (BRF) highlighted the growing interest in the global outreach of e-CNY.
During the forum, China entered into digital currency collaboration agreements with central banks from the UAE and Indonesia.
It’s reported that over 150 countries and more than 30 global entities entered into economic collaboration agreements at the event, as per statements from Chinese official news channels.
Representatives from Serbia’s central bank have also entered into agreements related to yuan settlements with their Chinese colleagues.
The forum stands as the flagship event for the Belt-and-Road Initiative (BRI).
BRI represents China’s grand vision of financing infrastructure ventures globally.
Additionally, the news source highlighted that Chinese stakeholders are looking to merge the e-CNY with the Cross-Border Interbank Payment System (CIPS).
Inaugurated in 2015, CIPS was developed to promote the yuan’s international use.
Many consider CIPS as a potential alternative to SWIFT.
Alpha Factory commented:
“The interplay between the digital yuan and the CIPS is mutually beneficial, with CIPS indirectly spurring the growth of the e-CNY.”
Yet, what could be even more pivotal is the ability of China’s CBDC to operate independently of systems like SWIFT and CIPS.
The news source elaborated:
“Under the current global transaction framework, cross-border payments are predominantly dependent on accounts and banking institutions. However, with the CBDC, traditional accounts become obsolete, replaced by the notion of a digital wallet. International businesses can establish CBDC wallets through local banks without the necessity of having an account in a foreign bank.”
This is expected to lead to “quicker and more efficient settlements” in the yuan.
MOG’s latest H1 report highlighted the company’s achievements in leveraging the digital yuan for “supply chain financing situations.”
Moreover, the firm has garnered “backing” from some of the nation’s top-tier institutions, according to the media. This is as MOG plans to introduce insurance and reinsurance products powered by the digital yuan.
Several other Chinese entities, including leading banks, are delving into digital yuan-integrated supply chain solutions utilizing smart contract tech.
Recent activities with firms based in Singapore and Hong Kong indicate a keen interest among Chinese businesses to widen their digital yuan ventures, encompassing overseas supply chain operations.
China Eyeing Overseas Progress for the e-CNY?
In a recent interview with Stockstar, IT company and digital currency interoperability specialist, Sifang Jingchuang, disclosed that it has extended its operations to BRI nations including Thailand and Malaysia.
The enterprise offers fintech solutions to prominent banks such as HSBC, Standard Chartered, and Thailand’s KTB.
The company emphasized its proactive endeavors in examining the CBDC’s role in cross-border transactions and boasted its amassed technological expertise and proven implementations.
Furthermore, Sifang Jingchuang revealed that it has lent its support to various financial institutions, aiding them in both the deployment and promotion of the digital yuan across numerous regions.