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On Monday, the Shanghai Clearing House, a financial services clearing counterparty under China’s central bank, began digital yuan clearing and settlement services for trading in commodities.
Shanghai Clearing House Lets Users Make Cross-Bank Clearances In Digital Yuan
According to an announcement by the Shanghai Clearing House, the services allow users to make cross-bank clearings and settlements in commodities with the digital yuan.
The digital yuan has made headway in the commodities market, with Shanghai Clearing House saying it would launch digital yuan clearing and settlement services for bulk commodity trading starting Monday. https://t.co/14jifgi1qf pic.twitter.com/X6b4X4usfN
— Global Times (@globaltimesnews) June 25, 2023
The director of the Finance and Securities Institute of the Wuhan University of Science and Technology, Dong Dengxin, said:
The launch of the services will make cross-border settlement of bulk commodities more secure, faster, efficient, and cost-effective for financial institutions and service providers.
Dong further asserted that “China has become the world’s largest buyer of several commodities. The move will enable the internationalization of the Chinese currency and provide the world with a trusted clearing system.”
Digital Yuan Adoption
The digital yuan has been making significant strides in its development and adoption in various sectors.
In October 2022, Shandong International Commodity Exchange facilitated a one million yuan ($7 million) settlement on imported rubber with digital yuan, the first commodity trading used in Qingdao, China, and on June 20 the same city launched the country’s first digital yuan payments for urban rail tickets.
The digital yuan has also been gaining popularity in e-commerce, with JD.com Inc reporting a 216% increase in digital yuan users year-on-year during the recent 618 shopping festival. The platform also saw a 254% surge year-on-year in the number of digital yuan transactions.
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