According to the South China Morning Post, China’s digital renminbi has once again sounded the clarion call to promote the Belt and Road Initiative. Xuzhou City recently announced plans to use digital renminbi in cross-border trade.
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Xuzhou plans to use digital yuan in Belt and Road trade
Xuzhou is a city in eastern China's Jiangsu Province and the starting point for many freight trains to Europe. The local government recently announced a plan to promote the use of digital renminbi called "e-CNY", including in cross-border trade. The Xuzhou municipal government said the digital yuan can be used to "support the Belt and Road Initiative" and will first be used to pay for services and storage of goods carried by trains, and will also be used to pay taxes and utility bills in Xuzhou in the future. In addition, other areas in Suzhou City, including Xiangcheng District, Taicang City and Suzhou Industrial Park, have been paying salaries in digital yuan since last year.
Changshu City will use digital renminbi to pay civil servants
Changshu, another city in Jiangsu Province, will also further promote the use of digital renminbi. According to the Shanghai Securities News, starting next month, Changshu City, which is under the jurisdiction of Suzhou City, will use digital renminbi to pay the salaries of civil servants and public agency staff. This is an example of the further promotion of digital RMB in Jiangsu Province.
Hong Kong becomes a testing ground for cross-border payments using digital renminbi
Over the weekend, an official from the Hong Kong Monetary Authority (HKMA) said that the Guangdong-Hong Kong-Macau Greater Bay Area will become a testing ground for the use of digital yuan for cross-border payments. Chen Wenlong, deputy chief executive of the Hong Kong Monetary Authority, said at the Financial Development Forum that the Hong Kong Monetary Authority is working with the People's Bank of China to test digital renminbi as a cross-border payment tool. Shenzhen already started offering shopping discounts to Hong Kong tourists who pay with e-CNY in February this year, while last December, Bank of China (Hong Kong) also offered cash rewards to registered customers using the digital yuan.
In addition, Chen Wenlong also said that the monetary authorities of mainland China, Hong Kong and two other countries are exploring the use of China's central bank digital currency (CBDC) to "increase the efficiency and reduce costs of cross-border transactions." The program, involving Thailand and the United Arab Emirates, completed a 40-day trial in September 2022, with transactions totaling more than 150 million yuan (approximately $22 million) and involving 20 commercial banks.
The promotion of digital renminbi in China has already begun in 2014, with first testing starting in 2019 in pilot cities such as Shenzhen, Suzhou, Xiongan New Area and Chengdu. Currently, digital RMB has been promoted and used in 26 cities and regions in 17 provinces across the country. According to the latest data from the People's Bank of China, the total number of digital renminbi in circulation reached 13.6 billion yuan by the end of 2022. During the promotion process in Jiangsu Province, Xuzhou City, Changshu City and other places are constantly promoting the application of digital renminbi, and Hong Kong will also become a testing ground for cross-border payments, further promoting the international application of digital renminbi.
This article China’s One Belt and One Road cities promote digital renminbi, and Hong Kong becomes a cross-border payment experimental ground first appeared on Chain News ABMedia.