China's digital yuan is gaining traction in cross-border use as a growing number of transactions point to broader and more regular commercial applications, potentially bolstering the renminbi's role in international settlement and payments, experts said.
The development comes as recent volatility in the United States Treasury market has renewed discussion about diversification of the international monetary system. Central bank digital currencies — including e-CNY or the digital yuan — have been viewed as one possible avenue for supporting a more diversified system, given their potential to make cross-border payments faster, less costly and more secure.
Against this backdrop, Ping An Bank recently said that its Hangzhou branch in Zhejiang province had made the first e-CNY transaction in the lender's cross-border business. Using the Multilateral Central Bank Digital Currency Bridge (mBridge), the branch had processed a goods trade settlement for a high-end manufacturer in Jiaxing, Zhejiang.
Ping An Bank said the transaction shortened the intermediate clearing chain and significantly improved transaction security and settlement efficiency compared with conventional cross-border remittances.
