China accelerates CBDC pilot with cross-border precious metals transaction

China’s major lender has concluded the cross-border settlement for precious metals trading with digital yuan.

The Bank of China is set to expand the application of the country’s digital currency as the Beijing-based commercial bank has completed the first cross-border settlement for precious metals trading with digital yuan, the South China Morning Post reports.

The Shanghai branch of the state-owned bank has reportedly conducted the settlement, transferring 100 million yuan (around $14 million) in cash from an overseas buyer and depositing the funds as digital yuan into an account under the Shanghai Gold Exchange. The transaction is also said to involve collaboration with the bank’s Hong Kong branch.

The Bank of China has a history of engaging in pilot projects involving the country’s central bank digital currency (CBDC), actively participating in ious digital transactions.

The bank’s latest effort, for example, resulted in collaboration with BNP Paribas in May, aiming to promote the use of digital yuan among the French institution’s corporate clients in China.

Meanwhile, the adoption of digital yuan in China is witnessing a noticeable growth, with total e-yuan transaction volumes reaching 950 million and a cumulative value of 1.8 trillion yuan as of July.

Former People’s Bank of China Governor Zhou Xiaochuan, who served for 16 years until 2018, pointed out in a late November conference in Hong Kong that the nation is nearing the conclusion of its multi-year digital yuan pilot, stating that the “final stage is not very far away.” Xiaochuan highlighted that China has already digitized approximately 90% of retail payments and emphasized the significant business opportunity in cross-border payments for central bankers to consider and explore.