Bank of China Hong Kong, the second-largest bank in the region, marks a historic moment by completing its first cross-border digital yuan-based trade. The $3.4 million transaction for imported iron ore showcases the digital yuan’s potential in international settlements.
Bank of China Hong Kong, the second-largest financial institution in the region, has successfully facilitated its inaugural cross-border digital yuan transaction. This milestone involved settling a $3.4 million bulk commodity payment for an imported iron ore trade. Acting as an intermediary between Baosteel Group and Bao-trans Enterprises, the bank utilized digital yuan wallets to receive the funds in the latter’s name.
This marks a significant step in extending the application of the Chinese central bank digital currency (CBDC) to international settlements. Xing Guiwei, Deputy Chief Executive of Bank of China Hong Kong, emphasized the potential of the digital yuan beyond retail payments, stating that the successful trial contributes to normalizing its usage among corporates and furthering yuan internationalization.
The move aligns with China’s broader efforts to internationalize its digital currency. Notably, Standard Chartered began offering digital yuan exchange services in China, and a partnership between the People’s Bank of China (PBOC) and the Monetary Authority of Singapore (MAS) enables tourists from both nations to spend digital yuan.